Gold prices hovered around the US$4,200 level on Friday, with the tug-of-war between bullish and bearish forces extending into a third session as traders awaited a fresh round of United States economic data.
By 3:40 pm AEDT (4:40 am GMT), spot gold edged up 0.1% to US$4,213.61 per ounce.
The precious metal has struggled to find a clear direction despite growing expectations that the Federal Reserve will deliver an interest rate cut next week.
One factor limiting gold’s momentum has been the earlier rise in U.S. Treasury yields, triggered in part by volatility in Japan’s bond market earlier in the week.
The spillover unsettled global investors and curbed appetite for non-yielding assets.
However, sentiment stabilised after a solid Japanese bond auction on Thursday, which helped drive global yields lower and arrested the climb in U.S. Treasury yields.
This shift has limited the downside for gold during Asian trade, as the softer yield environment weighed on the U.S. dollar and kept the metal supported.
U.S. labour market data offered mixed signals. Initial jobless claims fell by 27,000 to a seasonally adjusted 191,000 for the week ended November 29, the lowest reading since September 2022.
However, a separate report from Challenger, Gray & Christmas showed employers announced 71,321 job cuts in November, the highest for that month since 2022.
The contradictory indicators did little to sway expectations of a rate move, with markets continuing to price in a roughly 88.2% chance of a Fed cut this month, according to the CME Group FedWatch Tool.
Attention now turns to the delayed U.S. annual core personal consumption expenditures (PCE) price index for September, the Fed’s preferred inflation measure.
The release had been postponed due to the 43-day government shutdown, but analysts suggest it is unlikely to be a major market mover for gold.
Later in the session, the University of Michigan’s preliminary consumer sentiment and inflation expectations data will be released.
