Gold steadies near two-week high ahead of key US jobs data

Gold steadies near two-week peak ahead of key US jobs data that could sway Fed rate cut bets.

Berto Tordecilla

Berto Tordecilla

Spot Gold (XAU/USD) steadied near two-week highs on Friday morning ahead of highly anticipated US nonfarm payrolls data, which could provide further direction on Federal Reserve interest rate policy.

The precious metal was trading at $2,055 per ounce at 07:45 GMT, after having hit $2,066 on Thursday on a weaker US dollar and firming expectations of Fed rate cuts later this year. While the Fed has signalled that rate cuts may not begin as early as March, futures markets are now pricing in a quarter percentage point reduction by May.

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This has helped lift gold from early-year lows despite the Fed’s hawkish posture. Analysts suggest the metal’s haven appeal remains in place with further US rate cuts still on the cards and escalating tensions in the Middle East. Yet gains slowed on Friday as traders hesitated before the jobs report, which economists say could show cooling in January labor market growth. An upside surprise, however, may dampen imminent hopes of a policy pivot.

Friday’s data comes ahead of Fed Chair Jerome Powell’s speech next week, which will be monitored for any tweak in the central bank’s tightening stance. For now, gold appears to be drawing support from a weaker dollar and still-elevated recession fears in 2024.

Non-Farm Employment forecast 187K.

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