Gold rises, set for fourth straight weekly gain

Spot gold was up 0.6% at $3,654.37 per ounce, with the contract hovering near a record high of $3,673.95 hit on Tuesday

Gold prices rose on Friday and were set for a fourth straight weekly gain, as growing concerns over a weakening U.S. labour market eclipsed inflation concerns ahead of a widely expected U.S. central bank rate cut next week.

Spot gold was up 0.6% at $3,654.37 per ounce, as of 0211 GMT. The contract hovered near a record high of $3,673.95 hit on Tuesday. Bullion has added 1.9% so far this week.

Now the market is looking for a high chance of at least three interest rate cuts before 2025 ends, which is much more than earlier projections from two months ago, OANDA senior market analyst Kelvin Wong said, adding that this is helping gold at the moment.

U.S. consumer prices increased 0.4% in August, the steepest monthly rise in seven months, while data on Wednesday showed an unexpected drop in U.S. producer prices in August.

Weekly jobless claims surged last week, underscoring a softening in labour market conditions. This followed the U.S. employment report last Friday, which signalled job growth nearly stalled in August.

The U.S. central bank is widely anticipated to lower its key interest rate by 25 basis points on Wednesday, with a slim possibility of a 50-basis-point cut, according to CME Fedwatch tool.

Non-yielding bullion, often considered a hedge against inflation and economic uncertainties, tends to perform well in a low-interest-rate environment.

It’s not far off from $3,700. So that could happen at any moment. In the short term, we see some resistance at about $3,900 according to our technical analysis, but long term, we feel that it is probably still heavily underowned by most institutions, said Ryan McIntyre, managing partner at Sprott Inc.