The struggle persists for the gold price (XAU/USD) as it maintains a narrow trading band below the $2,050 level on Friday, showing a reluctance among traders to take aggressive directional positions. This cautious approach is prevalent ahead of the release of the highly anticipated Nonfarm Payrolls (NFP) report, set to provide more clarity on the Federal Reserve’s future policy decisions and consequently influence the near-term trajectory for the non-yielding yellow metal.
The current market sentiment is marked by investors refraining from significant directional bets, opting to wait for the official monthly employment details from the United States. Thursday’s optimistic US labor market reports have led investors to revise down expectations for a more aggressive policy easing by the US central bank. This shift in sentiment supports elevated US Treasury bond yields, acting as a favorable factor for the US Dollar (USD) and imposing limitations on potential gains for the gold price.
Despite these factors, the downside for gold appears constrained amid the prevailing cautious market mood, which tends to enhance the precious metal’s safe-haven appeal. Nonetheless, the XAU/USD remains within reach of a one-and-a-half-week low reached on Wednesday as traders closely monitor upcoming economic data releases for further insights.
