By Katherine Dunn 

Gold prices were flat on Friday as investors await a signal from U.S. jobs data that could provide a clue about the timing of a U.S. interest rate increase, and with it, the appetite for this precious metal.

The most actively traded contract, for December delivery, was down $0.20, or 0.01%, at $1,124.40 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold has disappointed its investors in recent weeks, closing lower for seven of the past nine sessions despite the market volatility and concerns over global growth that would typically support its price.

The U.S. nonfarm payroll numbers are crucial in determining the pace of the country's economic recovery. Strong jobs growth could indicate that a September rate increase is still on the cards.

That would strengthen the dollar and dampen the appeal of gold, which is denominated in dollars. Also, the metal doesn't pay interest or dividends so is more competitive when interest rates are near zero.

But if the jobs data are disappointing, gold could get a boost.

"This will give the market some further clues about how the Fed will be thinking about raising rates," said Robin Bhar, head of metals research at Société Générale. "It really hinges on today."

Still, gold could see some buying as traders prepare for the coming long Labor Day weekend in the U.S., and the return of Chinese traders from their public holiday, by covering short positions, Mr. Bhar said.

Some analysts also expect gold to see buying on the back of an expected further round of economic stimulus from the European Central Bank. Though statements from the ECB on Thursday, encouraging this belief, failed to boost prices, the prospect of further stimulus will likely increase the precious metal's appeal in the longer term, said Carsten Fritsch, senior commodities analyst at Commerzbank AG.

The ECB's announcement of quantitative easing earlier this year helped rally prices due to expectations of higher inflation. Gold is seen as a hedge against inflation.

"I think over the long term prices will rise," Mr. Fritsch said.

Tatyana Shumsky contributed to this article

Write to Katherine Dunn katherine.dunn @wsj.com

(END) Dow Jones Newswires

September 04, 2015 07:38 ET (11:38 GMT)