Gold gains as dollar stalls, with focus on US data

Gold rose on Friday as the dollar's rally stalled, with investor focus turning to US jobs data later in the day, though bullion was still down over the week.

Spot gold was up 0.4 % at $1,937.96 an ounce by 1137 GMT.

But the metal was still on course for a 1.4% decline over the week, driven by earlier gains in the dollar coupled with some upbeat data including robust manufacturing figures from the United States and elsewhere, which kindled hopes for a fast revival from the COVID-19 pandemic-induced economic slump.

US gold futures rose 0.4% to $1,945.70 an ounce.

"The job report will set the stage for all asset classes," said Saxo Bank analyst Ole Hansen.

"If the equity markets close on a weaker note after the report, and given the US is heading into a long weekend, we might see some strength in gold."

The dollar index steadied, taking a breather from a rally that set the greenback on track for its best week since mid-May.

"Since the recovery, movement in USD has stopped for the moment. That is a positive element for gold," said ActivTrades chief analyst Carlo Alberto De Casa.

A weaker dollar makes gold cheaper for holders of other currencies.

Global equities edged lower as attention turned to the US non-payroll figures due at 1230 GMT, with markets expecting payrolls to have grown by 1.4 million in August, compared with 1.763 million jobs created the previous month.

Gold, which has gained 27% this year, is still strong but "in need of a deeper correction", Saxo bank's Hansen said. Elsewhere, silver gained 0.6% to $26.78 an ounce but has shed 2.6% over the week, while palladium dipped by 0.1% to $2,282.67.

Platinum rose 1.6% to $903.38 an ounce but was on track for its worst week since mid-June, down more than 2.8%.