Gold prices edge lower as spotlight shifts to US non-farm payrolls data

Gold prices edged lower on Thursday as investors held back from placing big bets ahead of US non-farm payrolls data that could influence the Federal Reserve's interest rate trajectory as markets awaited this year's final policy-setting meeting.

Spot gold was down 0.1 per cent at $2,648.69 per ounce, as of 1030 GMT. US gold futures also eased 0.1 per cent to $2,672.40.

The market's focus is on initial jobless claims due later in the day and the US non-farm payrolls (NFP) report on Friday, with the payrolls likely increasing by 200,000 jobs in the month after rising by only 12,000 in October.

A robust NFP number is more or less priced in, and if we see weakness in the report, it could add some support to gold prices, said Ole Hansen, head of commodity strategy at Saxo Bank.

"I think for now we're approaching the year-end. Big decisions are not being made at this point in time. So, it's mostly intraday stuff and perhaps some profit-taking emerging ahead of year-end," Hansen said.

Fed Chair Jerome Powell said on Wednesday that the US economy is stronger than expected and suggested a more cautious stance towards interest rate cuts.

Traders are pricing in a 74 per cent chance of a 25-basis-point cut at the Fed's Dec. 17-18 meeting, according to the CME Group's FedWatch Tool. Bullion, which does not pay any interest, historically performs well in a low-interest rate environment.

"Gold prices could see a short-term rise toward $2,700 per ounce, driven by seasonal weakness in the US dollar, which historically underperforms in December. However, a deeper correction in gold prices remains possible over the medium term," said Zain Vawda, market analyst at MarketPulse by OANDA.[USD/]

Spot silver was up 0.3 per cent to $31.37 per ounce. Platinum rose 0.5 per cent to $945.42 and palladium gained 0.5 per cent to $982.39.