Gold prices climbed on Friday due to a weakening dollar following reports of a struggling U.S. labor market. Spot gold rose by 0.4% to $3,994.03 per ounce, although it was on track for a weekly loss of 0.3%. This increase comes after gold fell by nearly 8% from its record high of $4,381.21 on October 20. U.S. gold futures for December delivery also saw a 0.3% rise to $4,004.40 per ounce.

The U.S. private-sector jobs report showed a decline in October, especially in the government and retail sectors. Business layoffs and the implementation of artificial intelligence further contributed to the job losses. This data has fueled expectations of another U.S. interest rate cut, making gold an attractive option for investors.

Market analysts, such as Soni Kumari, a commodity strategist with ANZ, believe that the private jobs data suggests a high possibility of a rate cut in December, providing support for gold prices. The ongoing U.S. government shutdown, now the longest in history, has amplified safe-haven demand for gold amid economic uncertainty.

The decline in the dollar, in response to indications of a weak U.S. labor market from private sector surveys, has also contributed to the increase in gold prices. Investors are now looking at macroeconomic indicators and eagerly awaiting the resolution of the government shutdown to gauge the future trajectory of the gold market.

In addition to gold, other precious metals experienced mixed movement. Spot silver rose by 0.7% to $48.31 per ounce, while platinum fell by 0.4% to $1,534.21 and palladium increased by 0.3% to $1,379.33.

The uncertainty surrounding the U.S. labor market and the prolonged government shutdown continue to drive the demand for gold as a safe investment option, especially with the possibility of further interest rate cuts by the Federal Reserve in December. Investors are closely monitoring these developments to make informed decisions in the precious metals market.