Gold prices climbed during European trade on Friday, nearing record levels. However, investors remain cautious about making significant moves ahead of the critical U.S. payroll report due later today.
The upcoming data is expected to shape forecasts for a potential U.S. interest rate cut in November. Hawkish comments from Fed Chair Jerome Powell have already diminished the likelihood of a more substantial 0.5% rate cut.
Gold Prices
Gold prices gained 0.45% today, reaching $2,667 per ounce, with a session low of $2,654. This follows a slight dip of 0.1% on Thursday due to profit-taking after nearing record highs of $2,685.
Gold has also been under pressure from the strengthening U.S. dollar against major currencies.
Powell's Remarks
Earlier this week, Fed Chair Jerome Powell delivered a bullish speech in Tennessee, signaling that the Fed is likely to proceed with 0.25% rate cuts going forward and indicating there’s no urgency to make larger cuts.
Strong U.S. Data
Recent U.S. economic data revealed surprising strength. Job openings unexpectedly rose in August, private sector hiring exceeded forecasts in September, and the services sector reported its best performance since early 2023.
U.S. Interest Rates
According to the Fedwatch tool, the likelihood of a 0.5% rate cut by the Federal Reserve in November stands at 33%, while the probability of a smaller 0.25% cut is higher at 67%.
U.S. Payrolls
All eyes are on the U.S. payrolls report due later today. Analysts expect the economy to have added 147,000 jobs in September, with the unemployment rate predicted at 4.2% and average hourly earnings forecasted to rise by 0.3%.
SPDR Gold Trust
Gold holdings in the SPDR Gold Trust increased by 2.59 tonnes yesterday, bringing the total to 877.41 tonnes—the highest since January 2.
Euro's Weekly Decline
Meanwhile, the euro is set to record a weekly loss amid concerns over the European interest rate outlook.