Gold prices (XAU/USD) remained within a narrow range during the early part of the European session on Friday, hovering just below a one-month high around the $2,065 mark achieved in the previous trading day. Diplomatic efforts to establish a ceasefire in the Palestinian enclave, coupled with a slight rebound in US Treasury bond yields, acted as headwinds for the safe-haven precious metal.
Despite these factors, heightened tensions persist with the planned US strikes in response to the drone attack that killed three American soldiers in Jordan, keeping investors on edge. Additionally, ongoing economic struggles in China are tempering the latest wave of optimism.
A modest decline in the US Dollar (USD), driven by speculation that the Federal Reserve (Fed) may consider rate cuts in 2024, provides some support to the non-yielding Gold price. The mixed fundamental backdrop has left traders adopting a cautious approach, awaiting the release of the US monthly employment details later during the North American session.
Investors are keenly anticipating the Nonfarm Payrolls (NFP) report for fresh insights into the Fed’s policy trajectory, which is expected to influence the USD and potentially offer significant impetus to XAU/USD. The intricate blend of geopolitical tensions, economic uncertainties, and central bank policy expectations will likely steer gold prices as traders position themselves for potential market shifts.
