Gold sticks to modest gains, lacks bullish conviction ahead of US NFP report

Gold price witnessed an intraday turnaround from over a one-week low touched on Friday.
A softer risk tone, geopolitical risks, and trade war fears benefit the safe-haven commodity.
Bets for a less dovish Fed cap gains for the XAU/USD ahead of the crucial US NFP report.

Gold price (XAU/USD) stages a goodish intraday bounce from a one-and-half-week low touched during the Asian session on Friday and currently trades near the top end of its daily range, around the $2,640 level. Bets that the Federal Reserve (Fed) will lower borrowing costs at its December policy meeting keep the US Dollar (USD) bulls on the defensive near a multi-week low. This, along with persistent geopolitical risks stemming from the protracted Russia-Ukraine war and the ongoing conflicts in the Middle East, along with concerns about Trump’s tariff plans and a softer risk tone, offer some support to the safe-haven precious metal.

The intraday move up in the Gold price, however, lacks follow-through as traders seem reluctant to place directional bets and opt to wait for the release of the US Nonfarm Payrolls (NFP) report. The closely watched US jobs data will be looked upon for the interest rate outlook in the US and guide the Fed policymakers on their next monetary policy decision later this month. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the non-yielding bullion. Nevertheless, the XAU/USD, at current levels, seems poised to register losses for the second straight week.

Gold price bulls await US NFP report for cues about the Fed’s rate-cut path

The recent remarks from several influential FOMC members, including Federal Reserve Chair Jerome Powell on Wednesday, suggested that the US central bank could pause its rate-cutting cycle.
This, in turn, drags the non-yielding Gold price to over a one-week low on Friday, though a combination of factors offers some support to the bullion and helps limit any further depreciating move.
Russia has shown no sign of fatigue in a nearly two-year-old conflict with Ukraine and pounded the country’s east during the past week with long-range weapons and sustained ground assaults.
Concerns about US President-elect Donald Trump’s trade tariffs and their effect on the global economic outlook temper investors’ appetite for riskier assets and lend support to the safe-haven XAU/USD.
According to the CME Group’s FedWatch Tool, traders are pricing in a 70% chance that the Fed will lower borrowing costs by 25 basis points at the December meeting and a 30% probability of a pause.
Rate cuts bets held broadly steady after the US Department of Labor (DoL) reported on Thursday that Initial Jobless Claims rose to 224K for the week ended November 29, from 215K in the previous week.
The benchmark 10-year US Treasury yield languishes near its lowest level since October 22 and keeps the US Dollar depressed near a multi-week low, offering additional support to the precious metal.
Investors keenly await the release of the US Nonfarm Payrolls (NFP) report, which might offer cues about the Fed’s rate-cut path and determine the near-term trajectory for the USD and the commodity.

Gold price is likely to confront stiff barrier near the $2,655 horizontal zone

From a technical perspective, an intraday breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart and a short-term trading range support near the $2,633-2,632 area was seen as a key trigger for bearish traders. The subsequent swift recovery, however, warrants some caution before positioning for any further losses. Meanwhile, any further move up is likely to confront some resistance near the $2,649 region ahead of the $2,655 supply zone. Some follow-through buying beyond last Friday’s swing high, around the $2,666 area will shift the bias in favor of bulls and allow the Gold price to reclaim the $2,700 mark.

On the flip side, the Asian session low, around the $2,614-2,613 region, now seems to act as immediate strong support ahead of the $2,605-2,600 area. This is followed by the 100-day SMA, currently around the $2,583 zone, below which the Gold price could slide to the November monthly swing low, around the $2,537-2,536 area. The downward trajectory could extend further and eventually drag the XAU/USD to the $2,500 psychological mark.