Gold trimmed losses after Kyiv and its European allies rejected key parts of a US-Russia plan to end the war in Ukraine.

Bullion prices traded near $4,060 an ounce, heading for a slight weekly loss following a sell-off in equities and cryptocurrencies, and a poor US jobs report that clouded prospects for another Federal Reserve interest rate cut in December.

The leaders of Germany, France, and the UK agreed in a phone call with Ukraine's Volodymyr Zelenskiy that Kyiv's armed forces must remain capable of defending its sovereignty. The US has threatened to halt the provision of intelligence and weapons to Ukraine to pressure it to agree to the framework of a US-brokered peace agreement with Russia, Reuters reported. Geopolitical uncertainty has boosted gold's appeal as a safe-haven asset.

The tensions capped a turbulent week in financial markets, with the S&P 500 plunging to its lowest level in more than two months on Thursday, while Bitcoin continued its sharp decline, amid nervousness about the valuation of US technology stocks. Gold can sometimes suffer in equity downturns, as traders sell to meet margin calls.

Meanwhile, the Federal Reserve's final jobs report before its December 9-10 meeting showed that US job growth beat expectations in September, although unemployment edged higher.

The jobs report had "something for everyone, with both hawks and hawks able to back their corners," TD Securities analysts including Oscar Munoz said in a note.

The minutes of the Federal Open Market Committee's last October meeting, released on Wednesday, showed many Fed officials were leaning toward holding interest rates steady. Swap traders saw only a 40% chance of a rate cut next month, after favoring a quarter-point cut just two weeks ago. Bullion typically underperforms when interest rates are higher.

Despite its decline from last month's record high, gold has gained more than 50% this year and remains on track for its best annual performance since 1979. The sharp rally has been supported by inflows into exchange-traded funds and central bank buying. Many analysts view the faster gains recorded in the second half of the year as overdone, as the "dip trade" narrative about the retreat of sovereign debt and currencies has begun to gain ground.

Gold fell 0.4% to $4,062.89 an ounce as of 1:03 p.m. in London. The Bloomberg Dollar Spot Index was steady. Silver fell more than 2%, while palladium was also lower. Platinum edged up. (alg)

Source: Bloomberg