Gold Rebounds, USD Held Ahead of NFP
Gold (XAU/USD) attracted buyers again after the previous day's pullback from a more than two-week high, rising to the US$4,732-US$4,733 area during Friday's Asian session. The increase occurred as the US dollar remained subdued, despite renewed tensions in the Strait of Hormuz.
Market participants appeared to retain optimism about the potential for a US-Iran peace deal. This narrative has put renewed pressure on crude oil prices, which are seen as alleviating inflation concerns and reducing the likelihood that the Fed will have to take a more hawkish stance. This combination limits the dollar's strength and is supporting gold.
US Central Command stated on Thursday that US forces targeted Iranian military facilities it said were responsible for attacks on warships in the strategic waterway. Iran had previously accused the US of violating the ceasefire by attacking targets in and around the strait.
US President Donald Trump stated that the ceasefire with Iran remains in effect, adding that the situation will be "clear" if it ends. The US military also stated that it is not seeking escalation, which has further weakened the dollar's appeal as a safe-haven asset and provided additional support for gold.
On the other hand, geopolitical developments were not enough to support oil's intraday gains on Thursday, although downside risks appeared limited due to continued high uncertainty. Trump also warned that the US would strike "harder" if Iran did not sign a deal soon.
Looking ahead, the market believes that sustained economic growth and inflation concerns have shifted expectations for a Fed interest rate cut to late 2027 or early 2028. This has the potential to prevent further dollar weakness and, at the same time, limit gold's upside ahead of US employment data.
The next major focus is the Nonfarm Payrolls (NFP) report, scheduled for release in the North American session. The data is expected to show an increase of 62,000 jobs in April (up from 178,000 previously), with an unemployment rate of 4.3% and average hourly earnings of 3.8% year-on-year. This release will be a key determinant of Fed policy expectations, dollar movements, and gold's dynamics.
5 Key Points
-Gold rebounded to the US$4,732–US$4,733 area during Friday's Asian session after a pullback from a more than two-week peak.
-Optimism about a US–Iran peace deal weighed on oil, easing inflation concerns, and limiting the USD's strength.
-The US and Iran traded accusations of violations; US CENTCOM accused the US of attacking Iranian military facilities in connection with an attack on a strategic route.
-Trump believes the ceasefire remains in effect; the US military stated it does not seek escalation, supporting gold by weakening the USD's appeal.
-The prospect of a Fed interest rate cut has shifted to late 2027/early 2028, while the market awaits the NFP, which could potentially change policy expectations. (gn)
Source: Newsmaker.id
