- US private jobs data indicates weak labour market
- Traders see 67% chance of US interest rate cut in December
- China starts work on easing rare earth export rules
Nov 7 (Reuters) - Gold prices rose on Friday as the dollar softened and uncertainty around the U.S. government shutdown added to safe-haven demand, while Wall Street indexes were set for sharp weekly declines.
Spot gold was up 0.5% at $3,997.47 per ounce, as of 11:12 a.m. ET (1612 GMT). But the contract has fallen 0.1% this week.
U.S. gold futures for December delivery gained 0.1% to $3,993.60 per ounce.
Tech-heavy stock markets remained poised for their biggest weekly fall in seven months on Friday, as investors fretted over the sustainability of a rally in artificial intelligence stocks.
The U.S. dollar eased, making greenback-priced bullion cheaper for other currency holders.
"The recent price action technically suggests we may be putting in a floor underneath gold and silver prices," said Jim Wyckoff, senior analyst at Kitco Metals.
Gold is considered a hedge during uncertainty, and as a non-yielding asset, tends to benefit in low-interest rate environments.
With the U.S. government shutdown delaying the release of the monthly non-farm payrolls report, traders turned to private sector data, which showed job losses in October, to gauge the likelihood of another Federal Reserve interest rate cut this year.
Markets now see a 67% chance of a 25-basis-point rate cut in December, according to CME Group's FedWatch tool.
Meanwhile, China has started designing a new rare earth licensing regime that could speed up shipments, though it is unlikely to fully lift restrictions as Washington had hoped, industry insiders said.
"Even though the waves in trade policy have calmed down somewhat, the conflicts are by no means resolved. Gold is therefore likely to remain in demand as a safe haven," Commerzbank said in a note.
Elsewhere, spot silver climbed 0.7% to $48.30 per ounce. Platinum rose 0.3% to $1,545.61 and palladium was up 0.7% at $1,385. All three are headed for weekly losses.
Reporting by Pablo Sinha, Noel John and Kavya Balaraman in Bengaluru; Editing by Sahal Muhammed
Source: Reuters