Gold Weakens Ahead of NFP—Rebalancing & Dollar Weigh
Gold prices weakened on Thursday, losing steam after a sharp rally earlier in the week. Pressure came from two directions: potential selling in futures contracts related to the annual rebalancing of commodity indexes, and a strengthening US dollar, which makes gold more expensive for non-dollar buyers and triggers profit-taking.
Spot gold (XAU/USD) traded around $4,432/oz. Meanwhile, the Dollar Index (DXY) held in the 98.7–98.8 range, holding back any potential for a near-term gold rebound.
The market also tended to hold its breath awaiting the US Nonfarm Payrolls (NFP) report, which will be released on Friday. This data is a key determinant in interpreting the direction of the Fed's interest rate policy, which ultimately has a direct impact on the dollar, yields, and investor interest in non-yielding assets like gold.
If the NFP comes out weaker, expectations of an interest rate cut typically strengthen—and that could be a boost for gold. Conversely, if the data is solid, the dollar could potentially strengthen, opening up room for further corrections.
Despite this, gold's decline remains relatively contained due to geopolitical factors—including the US-Venezuela dynamic—which maintains safe-haven demand. The market is also likely to refrain from aggressive selling until there is clear confirmation from Friday's data.
Source: Newsmaker.id
