Gold prices inched higher during the North American session following weaker-than-expected U.S. employment data, which increased the likelihood of a 50-basis-point (bps) rate cut by the Federal Reserve (Fed). As of the latest trading, XAU/USD is priced at $2,493, marking a modest gain of 0.05%.
Gold Prices Fluctuate Amid Profit-Taking and Economic Data
Throughout the day, gold prices experienced fluctuations, driven largely by traders taking profits. The precious metal dipped to a daily low of $2,471 but subsequently recovered some ground after the U.S. Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS), indicating that job vacancies had fallen to their lowest level since January 2021.
The decline in job vacancies contributed to a drop in U.S. Treasury bond yields, with the 10-year benchmark yield falling nearly six bps to 3.776%. This shift has intensified speculation that the Fed might implement a more aggressive rate cut, driven by concerns that it may be lagging in its policy adjustments.
Fed Rate Cut Expectations and Dollar Weakness
The CME FedWatch Tool now shows a 43% probability of a 50-bps cut at the Fed’s September meeting, nearly a coin toss. The Federal Open Market Committee (FOMC) is scheduled to meet on September 17-18, with market participants closely watching for any policy shifts.
The U.S. Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, declined by 0.37% to 101.38. This drop follows a recent recovery from a year-to-date low, during which the index had risen nearly 1.30% over the past six days.
Market Sentiment and Upcoming Economic Data
Market sentiment remains cautious, partly due to stock market rotation and ongoing recession fears in the U.S. Looking ahead, gold traders are preparing for additional U.S. employment reports, including the ADP National Employment Change, Initial Jobless Claims, and the Nonfarm Payrolls (NFP) data, which could further influence gold prices and market expectations.
