Gold Enters Caution Mode Ahead of US Jobs Data
Gold prices weakened on Wednesday after briefly touching their highest level in more than a week earlier in the session. Pressure arose as investors opted to take profits after a brief rally, while the market began to focus on a series of US employment data that could alter expectations for the Fed's interest rate direction. In recent trading, spot gold fell 0.8% to $4,460/oz.
Gold's decline was also triggered by the strengthening US dollar, which remained near its highest level in more than two weeks. When the dollar strengthens, gold, priced in USD, automatically becomes more expensive for buyers compared to other currencies—making demand tend to be restrained. This situation puts pressure on the entire precious metals complex, not just gold.
Even so, market expectations remain tilted toward an easing scenario: investors believe the Fed could potentially cut interest rates at least two times this year. The market is now awaiting clues from employment data, including the ADP and JOLTS figures, which are released earlier, before the peak Non-Farm Payrolls (NFP) report on Friday—which typically triggers volatility in gold and the dollar.
Comments from Fed officials have added to the mix. Fed Governor Stephen Miran believes more aggressive interest rate cuts are needed to keep the economy moving. In theory, the prospect of lower interest rates typically supports gold because it offers no yield. However, in the short term, the market remains sensitive to "data strength"—if US data is too strong, the likelihood of a cut could be dampened, pressuring gold.
Beyond data, geopolitical factors also shape sentiment. A deal regarding Venezuelan oil exports to the US is seen as potentially shifting some supply away from China, adding new dynamics to the commodity market. Meanwhile, other precious metals also weakened: silver fell 2.5% to $79.27/oz, platinum fell 6.2% to $2,291.24/oz, and palladium fell 4.7% to $1,736.93/oz.
Source: Newsmaker.id
