Spot gold prices fell below the US$4,100 level on Friday, with gold remaining subdued in early trade as uncertainty around the United States Federal Reserve’s policy path kept investors cautious.
By 4:10 pm AEDT (5:10 am GMT), spot gold was down 0.5% at US$4,055.75 per ounce.
For the week so far, the metal is trading 0.7% lower.
Market sentiment remains clouded by debate over whether the Fed will deliver a rate cut in December, particularly after the release of the delayed September U.S. employment report on Thursday.
Headline U.S. nonfarm payrolls rose by 119,000 in September, following a revised 4,000 decrease in August. The figure surpassed market expectations of 50,000, while the unemployment rate edged higher to 4.4% from 4.3%.
Nevertheless, markets continue to price in roughly a 40% chance of a December rate cut, even as Fed officials stay cautious about further easing.
ANZ analysts noted: "Officials also remain divided over whether the slowdown in the labour market justifies another rate cut. After the jobs report, Chicago Fed President Goolsbee signalled he’s still apprehensive about delivering another cut at the central bank’s December meeting."
The hawkish tone surrounding the Fed has pressured non-yielding assets such as gold. However, the downside has been cushioned by the sharp tech sell-off on Wall Street and later in Asian markets, as the Nvidia-driven rally faded.
Additionally, a substantial economic stimulus package from Japan’s government estimated at more than JPY 20 trillion, the largest since COVID-19, has also helped support demand for safe-haven assets.
Traders are now turning their attention to the S&P Global preliminary PMI data for November, which could offer fresh insight into the health of the U.S. economy and shape expectations for Fed policy.
