Gold was trading near its highest since October on Friday, on track for its strongest weekly gain in a month as the dollar was pressured by growing doubts the Federal Reserve can stick to its interest rate hike campaign.
A shaky global economy has lifted buying interest in gold, making it among the best performing assets with a year-to-date gain of nearly 9 percent.
Other precious metals rode on gold’s rally, with silver and platinum also at multi-month highs. Silver is eyeing its best week since May last year.
Focus is turning to the US employment report due later in the day, with analysts saying a weaker-than-expected reading could stretch gold’s rally.
Spot gold was flat at $1,154 an ounce by 0211 GMT, after peaking at $1,157.20 on Thursday, its highest since Oct. 29.
Gold has gained more than 3 percent so far this week, on course for its biggest such increase since early January.
Bullion’s upward momentum increased this week after a key Fed official said there was a need to consider tighter financial conditions and the weakening global outlook in framing US monetary policy.
That spurred gold bulls, thinking it would be tough for the Fed to raise interest rates again this year after hiking them in December for the first time in nearly a decade.
Non-interest bearing gold is quite sensitive to US monetary policy. Its recent upturn has prompted some analysts to have a more positive price outlook on the metal many had thought was bound to fall below $1,000 an ounce as the U.S. lifts rates.
HSBC analyst James Steel said gold’s rally appeared intact.
“We see no compelling reason for more than a normal retracement before bullion resumes an upward move. The rally is underpinned by risk-off sentiment, a weaker dollar and a shift in global monetary policy,” Steel said.
U.S. gold for April delivery eased 0.2 percent to $1,155 an ounce.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, continued to rise, reaching 22.3 million ounces on Thursday, the most since late October.
Ahead of the U.S. employment report, economists polled by Reuters are looking for nonfarm payrolls to increase by 190,000 in January, after rising by 292,000 in December. The unemployment rate is forecast to remain at a 7-1/2-year low of 5 percent.
Spot silver was steady at $14.85 an ounce, near Thursday’s three-month high of $14.91 and has gained 4 percent this week. Platinum dropped 0.7 percent to $901.74 an ounce, not far below a three-month peak, while palladium held close to a one-month top at $514.38.