Gold edged higher on Wednesday after data showed U.S. private payrolls rose at a moderate pace last month, while investors digested remarks from Federal Reserve Chair Jerome Powell and looked forward to Friday's non-farm payrolls report.

Spot gold was up 0.4% at $2,654.03 an ounce by 02:15 p.m. ET (1915 GMT). U.S. gold futures settled 0.3% higher at $2,676.20.

Private payrolls rose by 146,000 last month, the ADP report showed. Economists polled by Reuters had forecast private employment increasing by 150,000 positions.

Powell said the recent performance of the economy will allow the U.S. central bank to be more judicious with the future path of interest rate cuts.

Investors now await Friday's pivotal U.S. payroll report and next week's inflation data for clues on the Fed's policy trajectory.

Gold is seeing a muted reaction today, with a stronger impact expected from the upcoming U.S. nonfarm payrolls and if data points to weakening employment it would support prices, said Everett Millman, chief market analyst with Gainesville Coins.

U.S. central bankers on Tuesday signalled inflation is gradually heading toward the 2% target, hinting at potential interest rate cuts.

Traders are pricing in a 77% chance of a 25-basis-point cut at the Fed's Dec. 17-18 meeting. Bullion, which does not pay any interest, historically performs well in low-interest rate environments.

Safe-haven gold was also supported by global geopolitical unrest, including South Korea's political turmoil, France's government facing collapse, relentless Russian drone strikes in Ukraine and Israel threatening war with Lebanon if its truce with Hezbollah collapses.

Spot silver rose 1% to $31.33 an ounce, platinum lost 1.3% to $940.6 and palladium was up 0.5% at $976.56.

Source : Reuters