Gold Hits Seven-Week High Ahead of US Payrolls Data

Gold prices have surged to a seven-week high as investors await key US nonfarm payrolls data for clues on interest rates. The precious metal rose more than 1% on Friday and is set for its biggest weekly gain since January, according to StoneX analyst Matt Simpson.

The rally in gold is being driven by weaker oil prices, which have eased inflation concerns and reduced expectations of higher-for-longer interest rates. Gold is an inflation hedge, but elevated interest rates tend to weigh on its appeal as it offers no yield.

Simpson noted that the US Labor Department's nonfarm payrolls report for July is due at 1230 GMT, and regardless of how NFP plays out, $4,000 has proven to be a solid support level. Traders currently see a 55% chance of a US rate hike in September, according to the CME FedWatch Tool.

Silver prices are also testing the upper end of a trading range that has held for nearly two months, and a breakout could pave the way towards $68, said Marex. Platinum rose 1.5% to $1,755.90 and palladium gained 0.3% to $1,374.30.