Gold prices ticked higher during Friday's Asian trade, remaining below the key $2,670 resistance level for the third consecutive day amid escalating tensions between Israel and Iran.
Ahead of the NFP data release, market participants are repositioning, with profit-taking in the U.S. dollar helping inject new energy into the gold price.
A strong NFP report, combined with rising wage inflation, could prompt further U.S. dollar recovery, weighing on gold prices. Conversely, weaker-than-expected data could fuel expectations for a larger Fed rate cut in November, potentially sending gold back toward its record high of $2,686.
After reaching six-week highs against major currencies, the dollar has retreated slightly. Recent robust U.S. economic data, including better-than-expected employment figures and a rise in ISM Services PMI, have tempered expectations of a significant interest rate cut by the Federal Reserve in November.
The intensifying conflict between Iran and Israel is also providing a cushion for gold prices. Iran recently launched missile attacks on Israel following the deaths of Hezbollah leaders, prompting an Israeli retaliatory strike on Beirut.
The violence has raised concerns of a broader regional war, fuelling demand for gold as a traditional safe-haven asset.
Traders will also be watching closely for remarks from New York Fed President John Williams, which could provide additional insights into the Fed’s policy outlook.