Sept 5 (Reuters) - Gold's powerful rally took on fresh legs on Friday, with prices hitting a record high and getting closer to $3,600 per ounce, as weak U.S. jobs data further raised expectations for a bullion-supportive Federal Reserve rate cuts.
Spot gold was up 1.4% at $3,596.49 per ounce, as of 1402 GMT, having hit a record $3,596.76 earlier. The metal is now on track for its strongest weekly gain in nearly four months. U.S. gold futures for December delivery rose 1.3% to $3,653.30.
Bullion has surged 37% so far this year after a 27% gain in 2024 - driven by U.S. dollar weakness, central bank buying, a softening monetary policy backdrop and wider geopolitical and economic uncertainty.
Data showed U.S. job growth weakened sharply in August while the unemployment rate increased to 4.3%, confirming that labour market conditions were softening. Traders are now betting an 84% chance of a 25 basis-point rate cut and a 16% chance of a 50 basis-point cut in September.
"Gold makes new highs; bulls are looking at the clearly weakening trend of employment translating into multiple rate cuts," said Tai Wong, an independent metals trader.
"The outlook is undoubtedly bullish for gold as labour concerns override inflation for the short, probably medium term. However, I think we are still too far away from 4,000 unless there is a massive dislocation," Wong added.
Analysts have also flagged the independence of the Fed as a key factor in shaping gold's trajectory - an issue thrust into the spotlight after U.S. President Donald Trump attempted to fire Fed Governor Lisa Cook and put repeated pressure on the central bank to slash rates.
Bullion, which does not pay interest, tends to shine when rates are low and uncertainty is high, making it a go-to asset for investors seeking safety.
China and India are top gold consumers. Physical demand for gold in these hubs dropped this week due to record high prices.
August gold in reserves data from China's central bank, due on Sunday, will not catch the September record highs, but may still provide more clarity on how demand from central banks was being affected by high bullion prices.
Among other metals, spot silver rose 1.5% to $41.29 per ounce and was heading for its third consecutive weekly gain.
Platinum gained 1.9% to $1,393.25 and palladium fell 0.1% at $1,126.45.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Veronica Brown, Hugh Lawson and Krishna Chandra Eluri
