Gold adopts a sideways mode as traders await the US Nonfarm Payrolls report for fresh clues on the trajectory of Fed policy.
A weak figure would reignite speculation of the Fed enacting a 50 bps rate cut in November – driving Gold higher.
Technically, XAU/USD is consolidating in a medium and long-term uptrend.
Gold (XAU/USD) continues trading sideways in the $2,660s on Friday as traders brace for the release of what is likely to be the most significant macroeconomic data report of the week, the US Nonfarm Payrolls (NFP) for September published by the US Bureau of Labor Statistics (BLS).
The report will help clarify the state of the US labor market, which took over from inflation as the chief concern of the US Federal Reserve (Fed) in August after a pivotal speech by Fed Chairman Jerome Powell, in which he stated: "We do not seek or welcome further cooling in labor market conditions."
If the report shows the US labor market has worsened – particularly a rise in unemployment – it could bring back on the table the probability of the Fed making another double-dose 50 basis points (bps) (0.50%) rate cut at their November meeting. This, in turn, would likely spur Gold higher since lower interest rates increase its attractiveness as a non-interest-paying asset.
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