Rate Cut Uncertainty, US Data Pressure Gold
Gold prices weakened in the US session on Friday, with spot prices holding slightly above $4,060 per troy ounce and Comex futures also closing lower, putting gold on track for a weekly decline. The strengthening US dollar and rising government bond yields have caused the precious metal to lose some of its appeal as a non-yielding asset, so buying interest in the New York session is likely limited.
Fundamentally, pressure comes from still-solid US employment data. The September nonfarm payrolls report showed an increase of around 119,000 jobs, well above the 50,000 expected, while the unemployment rate rose to a four-year high. This combination has led market participants to believe that the Fed will not be too aggressive in cutting interest rates at its December meeting, temporarily dampening expectations of monetary easing, which typically support gold.
Meanwhile, physical gold demand in several Asian markets has also been sluggish, limiting the potential for a price rebound. Some investors are choosing to wait for further clarity regarding the Fed's policy direction and the release of subsequent inflation data before increasing exposure to this safe-haven asset. As long as the dollar remains strong and bond yields remain high, gold prices in the US session have the potential to move within a consolidation range with a downward bias.
Source: Newsmaker.id
