Gold Trades Sideways Ahead of US Jobs Report

Gold prices extended their sideways movement on Friday, trading above $4,450 in the European session. The commodity remained close to its weekly high set on Thursday as traders awaited the US Nonfarm Payrolls (NFP) report for cues about the Federal Reserve's policy path.

The NFP release is expected to provide insight into the Fed's decision-making process amid waning bets of a September rate hike. According to TD Securities, the NFP data will be closely watched by precious metals traders as markets navigate the renewed hawkish tone from the Fed and the latest escalation in energy prices.

Christopher Waller, Governor of the Federal Reserve, stated on Thursday that he leans towards keeping interest rates steady at the September FOMC meeting, provided there are no surprises from upcoming inflation data. This led to a sharp decline in US bond yields and the USD, which helped Gold prices recover from their four-week low.

However, inflation risks stemming from higher energy prices leave the door open for a rate hike later this month, capping the upside for Gold. Geopolitical tensions surrounding the Strait of Hormuz also contributed to the safe-haven demand for Gold and the USD.