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Gold prices remained stable on Friday as traders turned their attention to the upcoming U.S. nonfarm payrolls report, a crucial indicator for gauging the likelihood of an expected Federal Reserve rate cut this month.
U.S. consumer spending data from Thursday painted a picture of steady economic resilience, with slightly higher-than-expected growth in September boosting hopes of sustained strength going into the year’s end.
Picture: Gold prices steady at $2,747, as bearish momentum persists with potential for further consolidation, as seen on the VT Markets app.
The chart shows the pronounced drop gold took in recent sessions, but we’re seeing a settle near $2,747 after hitting an intraday low of $2,731.
This downward movement underscores the current market dynamics, where gold’s traditional role as a safe-haven asset appears dampened amid broader economic pressures.
Meanwhile, U.S. unemployment claims dropped as hurricane-related disruptions faded, easing some pressure on the labour market.
The upcoming U.S. nonfarm payrolls report, due later in the day, is expected to offer insights into the health of the labour market, which could influence the Fed’s decision on rates at its meeting next week.
Traders are currently betting on a 94% chance of a quarter-basis-point rate cut, according to the CME FedWatch tool, as the Fed aims to keep inflation in check while supporting employment.
The U.S. presidential election on Tuesday also adds an extra layer of uncertainty, with opinion polls showing a tight race. This political backdrop could boost safe-haven assets like gold as traders brace for potential volatility.
See also: US Election Fuels Gold Rally Amid Fed Rate Cut Bets
With inflation slightly above the Fed’s 2% target and easing wage growth, a rate cut appears more likely as a means to provide additional support to the labour market.
Gold, typically favoured in low interest rate environments, remains a preferred asset during periods of economic uncertainty, given its value-retention properties.
With key data on the horizon, including U.S. manufacturing figures and payrolls data later today, traders will be watching closely as these numbers could shape the Fed’s next moves and further impact gold’s trajectory as a safe-haven asset.
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