• Gold drops after robust US jobs report lowers pressure on the Fed.
• US 10-year T-note yield climbs to 3.971%, while the US Dollar Index hits mid-August highs at 102.58, capping Gold’s rise.
• Geopolitical risks involving Israel and Iran to support Gold, which could hit $2,700.

Gold price retraces after a stronger-than-expected US jobs report hinted that the labor market remains solid and that the Federal Reserve (Fed) will likely ease policy in 25-basis-point (bps) chunks. At the time of writing, the XAU/USD trades at $2,643, down 0.40%.

The US Bureau of Labor Statistics (BLS) revealed that the labor market is far from being in a tough spot following an outstanding September jobs report. The data reduced the pressure on the Fed, which reduced borrowing costs by 0.50% at the September meeting, amid fears of achieving the US central bank maximum employment mandate.

The Unemployment Rate ticked two tenths lower, while Average Hourly Earnings were mixed, with monthly readings decreasing, while in the 12 months to September it rose.

Traders reacted to the data, lifting the US 10-year T-note yield 12 basis points to 3.971%, a level last seen in mid-August 2024. That was one of the reasons that capped Gold prices. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six peers, also hit its highest level since mid-August at 102.58, up 0.63%.

The data locked in a 25 bps rate cut by the US central bank at the upcoming November meeting. In fact, a minimal percentage of investors project the Fed will hold rates unchanged.