Gold held steady on Friday but was on track for a third straight weekly gain, buoyed by a weaker dollar and U.S. Treasury Department efforts to hold down longer-term yields.
FUNDAMENTALS
Spot gold was little changed at $4,514.23 per ounce, as of 0031 GMT, after hitting its highest level since early June in the previous session. Prices were up 3.2% for the week.
U.S. gold futures steadied at $4,571.20.
The U.S. dollar was headed for a weekly loss, making dollar-priced commodities cheaper for holders of other currencies.
U.S. Treasury Secretary Scott Bessent said on Thursday he may further increase the government's repurchases of Treasuries. The Treasury on Wednesday announced that it would double the size of buybacks on longer-dated securities over the next quarter to at least $4 billion per operation.
Two Federal Reserve officials expressed caution when asked how the Treasury Department's debt management changes could affect the U.S. central bank's monetary policy choices.
Data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting that the labor market remains stable despite a surprise drop in employment in July and leaving the Fed in a position to keep its focus on containing inflation.
Markets are pricing in a 64% chance that the Fed will keep rates unchanged in September and a 36% chance of a hike, according to the CME FedWatch Tool.
Although gold is regarded as a hedge against turmoil and inflation, higher interest rates weigh on its appeal as a non-yielding asset.
On the geopolitical front, Bessent said the United States will impose "the toughest sanctions in history" on Iran, a move he suggested would lessen the need for new major military operations.
Among other metals, spot silver was flat at $68.03 per ounce. Platinum rose 01.1% to $1,846.29, while palladium steadied at $1,333.11. All three metals headed for weekly gains.
DATA/EVENTS (GMT)
0600 UK Retail Sales MM, YY Jul
0600 UK Retail Sales Ex-Fuel MM Jul
0645 France Business Climate Mfg, Overall Aug
0715 France S&P MFG, Services, Composite Flash PMI Aug
0730 Germany S&P MFG, Services, Composite Flash PMI Aug
0800 EU S&P MFG, Services, Composite Flash PMI Aug
0830 UK Flash Composite, Manufacturing, Services PMI Aug
1345 US S&P Global Mfg, Svcs, Comp PMI Flash Aug
1400 EU Consumer Confid. Flash Aug
