Gold prices were headed for a third straight weekly gain on Friday, although they eased slightly on the day as investors waited for the key U.S. jobs report and as Treasury yields ticked higher.
Spot gold was 0.2% lower at $1,864.49 per ounce by 0953 GMT, after hitting its highest level since May 9 at $1,873.79. Gold prices have risen about 0.6% so far this week. U.S. gold futures also eased 0.2% to $1,867.20.
"Yesterday's break above $1,860 can be seen as positive news for gold," said Carlo Alberto De Casa, external market analyst at Kinesis. "Many investors still believe that though central banks are scared by inflation, they are also scared by recession and therefore they would be cautious before raising rates."
The dollar steadied after falling about 0.8% on Thursday, while U.S. benchmark 10-year yields rose. Investors will be watching U.S. nonfarm payrolls data due at 1230 GMT that could give cues on the Federal Reserve's pace of monetary policy tightening in the second half of the year.
Signs of a tight labour market could keep the Fed's foot on the pedal to cool demand. Higher U.S. interest rates increase the opportunity cost of holding gold, which bears no interest, while boosting the dollar in which bullion is priced.
"I believe anything in line or above 325K will significantly bolster the dollar considering the recent strong manufacturing PMI release as well as last night's hawkish comments from the Fed's (Loretta) Mester," DailyFX analyst Warren Venketas wrote in a note about the jobs data.
Spot silver rose 0.2% to $22.32 per ounce and was headed for a third straight weekly rise.
Platinum dipped 0.2% to $1,020.76 per ounce, but is set for a weekly gain of about 7%, the most since June 2021.
Palladium fell 1.2% to $2,029.74 per ounce and was down more than 1% for the week.
(Reporting by Eileen Soreng in Bengaluru; Editing by Kirsten Donovan)