Gold set for fourth weekly rise as US data lifts rate-cut hopes

Gold prices rose on Friday and were headed for a fourth consecutive weekly gain, as fears of a weakening US labor market eclipsed inflation concerns ahead of an expected Federal Reserve rate cut next week.

FUNDAMENTALS

* Spot gold rose 0.1% to USD 3,637.06 per ounce as of 0059 GMT. Bullion gained 1.4% so far this week.

* US gold futures for December delivery were steady at USD 3,674.20.

* US consumer prices rose 0.4% in August, the steepest monthly rise in seven months, driven by higher housing and food costs, while data on Wednesday showed an unexpected decline in US producer prices in August.

* Weekly jobless claims surged last week, underscoring a material softening in labour market conditions after the US government said nonfarm payrolls may have been overstated by 911,000 jobs in the 12 months through March.

* This followed Friday’s employment report, which showed job growth nearly stalled in August.

* The Fed is expected to lower its key interest rate by 25 basis points on September 17 as labour market softness overshadows inflation risks, said almost all 107 economists in a Reuters poll, with most expecting another cut next quarter.

* US 10-year Treasury yields hovered near 4-month lows, while the US dollar index was headed for a weekly decline.

* Greenback-priced bullion, which hit a record high of USD 3,673.95 on Tuesday, is often considered a hedge against inflation and uncertainties and tends to perform well in a low-interest-rate environment.

* Meanwhile, US President Donald Trump’s administration on Thursday asked a federal appeals court to allow Trump to remove Fed Governor Lisa Cook from office for now after a judge said he likely lacked cause to do so.

* Elsewhere, spot silver fell 0.2% to USD 41.48 per ounce, platinum steadied at USD 1,378.40 and palladium held ground at USD 1,188.34. All three metals were set for a weekly rise.

(Reporting by Anmol Choubey in Bengaluru; Editing by Sumana Nandy)