Gold hovers near all-time high as soft US data boosts rate cut bets

Gold prices rose on Friday to hover near a record high scaled earlier in the week, as concerns over a weak labour market in the U.S. cemented expectations of multiple interest rate cuts by the end of the year, boosting demand for the yellow metal.

Spot gold was up 0.3% at $3,643.07 per ounce, as of 0817 GMT, near an all-time high of $3,673.95 touched on Tuesday. Bullion has gained 1.6% so far this week and was headed for its fourth straight weekly gain.

U.S. gold futures for December delivery were up 0.2% at $3,680.80.

"The market is preparing for the Federal Reserve to start cutting rates at the next meeting. The expectation is that this is not only one cut, (while) U.S. President Donald Trump's desire for lower policy rates also lifts gold's appeal," said UBS analyst Giovanni Staunovo.

Trump reiterated his call on Wednesday for Federal Reserve Chairman Jerome Powell to cut benchmark interest rates.

"Given these tailwinds and following the recent step higher in exchange-traded fund flows (ETFs), we now look for gold to rise to $3,900/oz by mid next year," he added.

Holdings for SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased to a three-year high last week.

U.S. consumer prices rose 0.4% in August, the steepest monthly rise in seven months, while weekly jobless claims surged to their highest since October 2021 last week.

The Fed will cut its key interest rate by 25 basis points on September 17, said almost all 107 economists in a Reuters poll.

Non-yielding bullion tends to perform well in a low-interest-rate environment.

Gold prices have risen about 39% so far this year, driven by a soft dollar, strong central bank buying, dovish monetary policy and heightened global uncertainty.

Elsewhere, spot silver rose 1.4% to $42.20 per ounce, a near 14-year high, platinum was up 0.5% at $1,385.09 and palladium gained 1% to $1,199.68. All three metals were set for weekly gains. (Reporting by Ishaan Arora in Bengaluru; Editing by Emelia Sithole-Matarise)