Gold steadied - after rising more than 2% on Thursday - after a Federal Reserve official's comments on inflation helped to lower the odds of an interest-rate hike.
Spot bullion was trading around $4,480 an ounce, and was poised to eke out a modest weekly gain after dropping sharply on Tuesday before rebounding. Fed Governor Christopher Waller said on Thursday he'd be willing to support holding rates steady if price pressures continue to show signs of easing.
Waller said his decision will be "heavily influenced" by August inflation data due next week and he was leaning toward holding if there were signs of progress on inflation. "But if inflation comes in hot, I would consider a rate hike," he said, before adding "recent data suggest we are finally seeing some signs of disinflation."
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Traders have pared their bets on a rate hike by the US central bank to about even, down from a roughly 70% chance earlier in the week, at its next meeting on Sept. 15-16. Lower rates would typically be positive for gold as it pays no interest.
Bullion also received a boost from growing expectations of yen intervention that added pressure on the dollar. The yen strengthened nearly 2% on Thursday, reversing a month of gradual decline, as the odds increase of the Bank of Japan hiking interest rates. It was the yen's best day since Tokyo and Washington entered the market to prop it up just over a month ago.
The dollar hit its lowest since May, which makes purchasing gold using other currencies more attractive.
Traders are now eyeing Friday's payrolls report and the inflation data due next week for fresh clues on the direction of US monetary policy.
Spot gold was 0.1% higher at $4,478.17 an ounce at 8:22 a.m. in Singapore. Silver was up 0.1% at $66.90 an ounce. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was stable after falling 0.6% the previous session.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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