Gold prices extended gains for the third consecutive session on Friday, by rising Rs 520 to Rs 1,21,133 per 10 grams, tracking firm global cues amid expectations of a US Federal Reserve rate cut following soft labour data.

On the Multi Commodity Exchange (MCX), gold futures for December delivery appreciated by Rs 520, or 0.43 per cent, to Rs 1,21,133 per 10 grams in a business turnover of 13,446 lots.

Silver futures also have robust traction. The white metal for December delivery rallied by Rs 1,598, or 1.09 per cent, to Rs 1,48,667 per kilogram in 19,396 lots.

"Gold and silver prices are attempting to establish a base before the next rise, following confirmation of supporting factors, including massive layoffs and the US government shutdown," Renisha Chainani, Head - Research at Augmont, said.

On the global front, Comex gold futures for December delivery rose by USD 13.02, or 0.33 per cent, to USD 4,004.02 per ounce while silver increased by 0.65 per cent to USD 48.26 an ounce.

"Gold prices rose to around USD 4,000 per ounce on Friday after soft labour data reinforced expectations of a near-term Federal Reserve rate cut," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.

He noted that new private sector employment data showed job cuts tripled in October, the largest increase in over two decades, with companies citing weaker consumer demand.

"The data has tempered optimism from the rebound in ADP payrolls and kept uncertainty over the US labour market elevated amid limited government data, placing greater weight on private reports," Trivedi added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.10 per cent to 99.84, capping the gains in the bullion prices by making it less expensive for foreign buyers.

Renisha Chainani of Augmont, said, "As the US government enters its longest-ever shutdown, investors will be watching for any economic data from private sources while official data remains missing".

An expert said, "traders will closely monitor private indicators such as the Michigan consumer sentiment and inflation expectations, along with the scheduled speeches from the Federal Reserve officials later in the day for cues on the monetary policy outlook".

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