Gold (XAU/USD) remained under mild pressure during Friday’s Asian session, though selling momentum stayed limited as the metal continued to trade within its weekly range. Market sentiment shifted after Thursday’s delayed release of the September US Nonfarm Payrolls (NFP) report, which further reduced the likelihood of a Federal Reserve (Fed) rate cut in December. This shift has been a key factor weighing on demand for the non-yielding metal.
At the same time, the US Dollar (USD) has paused its advance after recently hitting its highest level since May, as concerns grow that the prolonged US government shutdown is pressuring economic momentum. A softer tone across global equity markets is offering some safe-haven support for gold, helping limit deeper downside in XAU/USD.
Daily digest market movers: reduced Fed cut bets offset softer USD and risk tone
The US Bureau of Labor Statistics reported on Thursday that the economy added 119,000 jobs in September. This followed a revised 4,000 decline in August—initially reported as a 22,000 increase—and surpassed market expectations of 50,000.
Wage growth held firm, with Average Hourly Earnings rising 3.8% YoY, slightly above forecasts of 3.7%. Stronger wage data helped counter a rise in the unemployment rate from 4.3% to 4.4%, reinforcing expectations that the Fed may adopt a less dovish stance in the months ahead.
This followed Wednesday’s October FOMC minutes, which revealed policymakers remain divided on the appropriate policy path. According to the CME FedWatch Tool, market pricing for a December rate cut has now dropped to around 35%. This shift has supported the USD’s climb to multi-month highs and continues to pressure gold during the Asian session. However, fragile risk sentiment could still help cushion downside moves in the metal.
Traders now await US flash PMIs and the revised University of Michigan Consumer Sentiment Index for fresh direction. Additionally, speeches from key FOMC officials will be closely monitored for clues on the Fed’s rate-cut outlook. Geopolitical risks also remain elevated after Ukraine’s President Volodymyr Zelenskyy announced plans to negotiate with President Donald Trump on the US-backed 28-point peace framework—an element that could continue to support safe-haven flows into gold.
Technical outlook: Gold must break $4,020 support to confirm downside extension
Gold continues to hold above a rising trend-line support that has been in place for nearly a month, now positioned near the $4,020 level. This area also aligns with the 200-period Exponential Moving Average (EMA), reinforcing its role as a key technical pivot.
A decisive break below this zone would expose XAU/USD to further downside, potentially driving the metal beneath the psychological $4,000 barrier and opening the path toward support at $3,931. A continuation of the decline could lead to a retest of the late-October swing low near $3,886.
On the upside, bulls need a sustained move above the $4,100 mark to regain control. A breakout above this level could target resistance at $4,152–4,155, with momentum potentially extending toward the $4,200 round figure.
