Gold Holds Steady, Set for Third Straight Weekly Gain

Gold prices remained largely unchanged on Friday, but were on course to post a third consecutive weekly gain. The metal has been supported by a softer dollar and the U.S. Treasury Department's efforts to manage longer-term yields.

Spot gold was little changed at $4,514.23 per ounce in early Asian trading, after touching its highest level since early June in the previous session. Prices were up 3.2% for the week. U.S. gold futures steadied at $4,571.20.

The dollar was headed for a weekly loss, making dollar-priced commodities cheaper for holders of other currencies. Treasury Secretary Scott Bessent said on Thursday he may further increase the government's repurchases of Treasuries. The Treasury announced on Wednesday it would double the size of buybacks on longer-dated securities over the next quarter to at least $4 billion per operation.

Two Federal Reserve officials expressed caution when asked how the Treasury's debt management changes could affect the central bank's monetary policy choices. Data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remains stable despite a surprise drop in employment in July, leaving the Fed in a position to keep its focus on containing inflation.

Markets are pricing in a 64% chance that the Fed will keep rates unchanged in September and a 36% chance of a hike, according to the CME FedWatch Tool. Although gold is regarded as a hedge against turmoil and inflation, higher interest rates weigh on its appeal as a non-yielding asset.

On the geopolitical front, Bessent said the United States will impose "the toughest sanctions in history" on Iran, a move he suggested would lessen the need for new major military operations.

Among other metals, spot silver was flat at $68.03 per ounce. Platinum rose 0.1% to $1,846.29, while palladium steadied at $1,333.11. All three metals were headed for weekly gains.