Gold set for fourth weekly rise as US data lifts rate-cut hopes

Gold prices rose on Friday and were headed for a fourth consecutive weekly gain, as fears of a weakening U.S. labour market eclipsed inflation concerns ahead of an expected Federal Reserve rate cut next week.

FUNDAMENTALS

* Spot gold rose 0.1% to $3,637.06 per ounce as of 0059 GMT. Bullion gained 1.4% so far this week.

* U.S. gold futures for December delivery was steady at $3,674.20.

* U.S. consumer prices rose 0.4% in August, the steepest monthly rise in seven months, driven by higher housing and food costs, while data on Wednesday showed an unexpected decline in U.S. producer prices in August.

* Weekly jobless claims surged last week, underscoring a material softening in labour market conditions after the U.S. government said nonfarm payrolls may have been overstated by 911,000 jobs in the 12 months through March.

* This followed Friday's employment report, which showed job growth nearly stalled in August.

* The Fed is expected to lower its key interest rate by 25 basis points on September 17 as labour market softness overshadows inflation risks, said almost all 107 economists in a Reuters poll, with most expecting another cut next quarter.

* U.S. 10-year Treasury yields hovered near 4-month lows, while the U.S. dollar index was headed for a weekly decline.

* Greenback-priced bullion, which hit a record high of $3,673.95 on Tuesday, is often considered a hedge against inflation and uncertainties and tends to perform well in a low-interest-rate environment.

* Meanwhile, U.S. President Donald Trump's administration on Thursday asked a federal appeals court to allow Trump to remove Fed Governor Lisa Cook from office for now after a judge said he likely lacked cause to do so.

* Elsewhere, spot silver fell 0.2% to $41.48 per ounce, platinum steadied at $1,378.40 and palladium held ground at $1,188.34. All three metals were set for a weekly rise.

DATA/EVENTS (GMT)

0600 Germany HICP Final YY August

0600 UK GDP Est 3M/3M July

0600 UK GDP Estimate MM, YY July

0600 UK Services MM, YY July

0600 UK Manufacturing Output MM July

0645 France CPI (EU Norm) Final MM, YY August

0645 France CPI MM, YY NSA August

1400 U.S. U Mich Sentiment Prelim September.