Photo by Dmitry Demidko on Unsplash
 

Gold (XAU/USD) reverses a modest intraday dip to the $4,453 area and trades near the top end of its daily range heading into the European session on Friday. The upside, however, seems limited as traders might opt to wait for the US Nonfarm Payrolls (NFP) report later today. The crucial employment details will be looked upon for more cues about the Federal Reserve's (Fed) rate-cut path, which, in turn, will drive the US Dollar (USD) demand and provide a fresh directional impetus to the non-yielding yellow metal.

Heading into the key data risk, the growing acceptance that the US central bank will lower borrowing costs two more times this year, along with persistent geopolitical uncertainties, continues to act as a tailwind for the Gold price. The USD, however, defies dovish Fed expectations and prolongs a two-week-old uptrend to hit a nearly one-month top. This, in turn, might hold back the XAU/USD bulls from placing aggressive bets, warranting some caution before positioning for any meaningful intraday appreciating move.

Daily Digest Market Movers: Gold traders await US NFP for Fed rate-cut cues
 

• The US Dollar touches its highest level since December 10 during the Asian session on Friday and exerts some pressure on the Gold price amid some repositioning ahead of the key US Nonfarm Payrolls report.
• US Treasury Secretary Scott Bessent said on a CNBC interview on Thursday that lowering interest rates is the only ingredient missing for even stronger economic growth, which is why the Fed should not delay.
• Meanwhile, traders are pricing in the possibility that the US central bank will lower borrowing costs in March and cut rates again later this year. This could offer support to the non-yielding yellow metal.
• Traders, however, await more cues about the Fed's rate-cut path before placing fresh directional bets. Hence, the focus will remain glued to the release of the highly anticipated US monthly jobs data later today.
• The US economy is expected to have added 60K new jobs in December, down from 64K in the previous month, though the Unemployment Rate is seen edging lower to 4.5% from 4.6% recorded in November.
• In the meantime, heightened geopolitical uncertainties on the back of the US incursion in Venezuela, a diplomatic spat between China and Japan, and the protracted Russia-Ukraine war, might also support the XAU/USD pair.
• In a wide-ranging interview with The New York Times on Wednesday, President Donald Trump said that he expected the US would be running Venezuela and extracting oil from its huge reserves for years.
• Separately, China escalated its dispute with Japan, restricting exports of rare earths and rare-earth magnets to Japan. The ban follows the recent Taiwan-related remarks by Japan’s Prime Minister.
• German Chancellor Friedrich Merz said that an end to a nearly four-year war in Ukraine was quite far away, given Russia’s position, calling the plan for European troops to be deployed in Ukraine dangerous.

Gold needs to surpass $4,500 to back the case for additional gains
 

The XAU/USD pair holds above the rising 200-period Exponential Moving Average (EMA), currently pegged near $4,322.58, keeping the broader bias tilted higher. The average’s upward gradient underpins pullbacks. The Moving Average Convergence Divergence (MACD) line remains below the Signal line and beneath the zero mark, though it is turning higher. The negative histogram is contracting, suggesting fading bearish pressure.

RSI at 56 sits above the neutral 50 line, aligning with improving momentum without signaling overbought conditions. If momentum continues to firm, bulls could extend the recovery, while dips would be cushioned by the prevailing trend. Holding above $4,322.58 would preserve the bullish tone, whereas a decisive break below that average would open a deeper retracement.

More By This Author: