Gold News: XAU Poised for Volatility as Traders Await US Jobs Data

At 11:44 GMT, XAU/USD is trading $2661.48, up $5.37 or +0.20%.

Traders Focus on US Jobs Report and Federal Reserve Policy

Gold prices have remained largely unchanged in the lead-up to the U.S. jobs data. Investors are cautious, as the results could significantly influence the Federal Reserve’s monetary policy and future interest rate decisions. Gold, which tends to perform well during periods of low interest rates, has already enjoyed a strong rally in recent weeks. However, rising U.S. Treasury yields and a stronger U.S. dollar are currently providing some headwinds to further gains in gold prices.

Nitesh Shah, a commodity strategist at WisdomTree, remarked that gold’s recent upward run may be taking a temporary pause due to these opposing forces. “Gold has had a very good run in recent weeks, so it’s not surprising it isn’t pushing significantly higher… U.S. Treasury yields have risen and the dollar has appreciated, presenting some headwinds despite the geopolitical tailwind,” Shah commented.

Geopolitical Tensions Offer Safe-Haven Support

While gold faces pressure from rising yields and a stronger dollar, escalating geopolitical tensions continue to offer support for the safe-haven asset. U.S. President Joe Biden’s recent refusal to publicly negotiate with Israel regarding Iran’s oil facilities, along with Israel’s ground incursion in Lebanon to combat Hezbollah, have kept geopolitical risks at the forefront. Historically, gold prices tend to rise during periods of conflict and instability, as investors seek refuge in the metal.

India’s Gold Demand Sees Modest Improvement

In addition to global factors, India’s domestic gold demand has seen slight improvement this week ahead of a key festival, though overall demand remains weak due to elevated prices. Higher gold prices have tempered buying interest in one of the world’s largest gold-consuming nations.

Market Forecast: Gold Prices Outlook Mixed, but Volatile

As traders focus on the U.S. Non-Farm Payrolls report, the outlook for gold remains mixed. A weaker-than-expected jobs report could raise expectations for a more dovish stance from the Federal Reserve, potentially leading to a rally in gold prices, possibly back toward the $2,683 mark.