Gold eyes longest weekly losing run since 1999, US jobs data in focus

Gold steadied near a 5-1/2-year low on Friday, remaining on track to stretch its weekly losses to a seventh week, its longest such slump since 1999, ahead of key US data that may determine how soon the Federal Reserve raises interest rates.

Spot gold

Bullion is down 0.5% for the week, marking its seventh weekly loss in a row and matching a similar streak in May-June 1999.

US gold for December delivery slipped 0.1% to $1,088.70 an ounce.

The number of Americans filing new applications for unemployment benefits rose less than expected last week, suggesting labour market conditions are continuing to tighten.

That further strengthens the case for the Fed to raise interest rates this year for the first time since 2006, weighing on non-interest yielding gold. Analysts say that rate hike could come as soon as Fed policymakers meet next month.

The key may be the US nonfarm payrolls data due later in the day. Economists polled by Reuters show the US economy added 223,000 jobs in July, the same pace as June.

Expectations that the Fed could increase rates next month grew louder this week after Atlanta Federal Reserve President Dennis Lockhart added his voice to that possibility, saying only a "significant deterioration" in the US economy would make him not support a rate hike in September.