Gold prices held steady on Wednesday as investors adjusted positions ahead of US nonfarm payrolls data, seeking more clarity on the timing of the Federal Reserve's next interest rate cut.

Spot gold was up 0.1% at $3,341.92 an ounce, as of 11:49 a.m. EDT (15:49 GMT), while US gold futures were up 0.1% at $3,352.50.

"We're seeing a lull here with the holiday-shortened week, and we're going to get the unemployment report on Thursday. So there's kind of a positioning, with people just waiting to see what that report shows," said Jim Wyckoff, senior analyst at Kitco Metals.

Earlier today, the number of U.S. private sector workers unexpectedly fell in June, and the ADP National Employment Report showed that job gains in the previous month were smaller than previously estimated.

After the data, traders raised their expectations for a Fed rate cut this year to 67 basis points, up from a previous expectation of 64 basis points.

On Tuesday, U.S. job openings unexpectedly rose in May, but a drop in hiring added to signs that the labor market has shifted into a lower gear.

Federal Reserve Chairman Jerome Powell on Tuesday reiterated that the Fed is taking a patient approach to further rate cuts. However, he did not rule out a cut at this month's meeting, saying it all depends on incoming data.

That raises bets for the monthly nonfarm payrolls report due on Thursday for further insight into the health of the labor market. "If we get a much stronger jobs report than expected, that would be bearish because the Fed may not be able to cut rates as quickly as it would like or as much as it should," Wyckoff added.

Gold, traditionally seen as a hedge during times of uncertainty, also thrives in a low-interest-rate environment. Traders are also focused on uncertainty over U.S. tariffs ahead of a July 9 deadline. Adding to investor concerns, Trump's massive tax and spending bill, which is expected to add $3.3 trillion to the national debt, is heading to the House of Representatives for possible final approval.

Spot silver rose 1.1% to $36.46 an ounce, platinum gained 4.3% to $1,408.33, while palladium rose nearly 5% to $1,153.85. (alg)

Source: Reuters