Spot gold was little changed at $2,377.80 per ounce as bullion has added nearly 2% so far this week
Gold prices held firm on Friday and were set for their first weekly gain in three as traders raised bets that the Fed will start cutting rates soon, sending the dollar and Treasury yields down.
Spot gold was little changed at $2,377.80 per ounce as of 0718 GMT. Bullion has added nearly 2% so far this week.
U.S. gold futures added 0.2% to $2,396.50.
The dollar hovered near an eight-week low and the benchmark 10-year U.S. Treasury yield dropped as much as 4.275% on Thursday, its lowest since April 1, making bullion more attractive for investors.
Gold prices have been holding up lately as dropping bond yields and a struggling U.S. dollar have offered a supportive environment for the yellow metal, according to IG market strategist Yeap Jun Rong.
Markets now look forward to U.S. nonfarm payrolls data at 1230 GMT and are bracing for the possibility that jobs growth will be below the 185,000 median forecast of economists.
It may have to take a significant downside surprise in labour conditions to convince the Fed of an earlier rate reduction, given that inflation progress has broadly stalled near the 3% level. Any weaker labour market data could translate to upside in gold prices, he added.
A run of weak macro data this week added to signs that inflation was cooling and that the Federal Reserve would start reducing rates as early as September.
Lower rates reduce the opportunity cost of holding non-yielding bullion.
Gold prices are expected to reach another record high this year despite a decline in physical demand, according to consultancy Metals Focus.
