Gold steadies below $2,050 as markets await nonfarm payrolls report
Investing.com-- Gold prices moved little in Asian trade on Friday after sinking below key levels this week following a sharp rebound in the dollar, with focus now squarely on key U.S. labor market data for more cues on interest rate cuts in 2024.
The yellow metal was nursing some losses for the week following a strong melt-up towards the end of 2023. But the rally failed to sustain amid profit-taking and growing uncertainty over the Federal Reserve’s plans for interest rate cuts this year.
Markets slightly scaled back bets that rate cuts could begin by as soon as March 2024, after the minutes of the Fed’s December meeting offered few cues on when the bank planned to begin trimming rates.
This trend spurred sharp gains in the dollar, with the greenback headed for an over 1% weekly gain- its best since July 2023.
Spot gold rose 0.1% to $2,045.41 an ounce, while gold futures rose 0.1% to $2,052.05 an ounce by 23:25 ET (03:25 GMT). Both instruments were down between 0.8% to 1% this week.
Markets were now focused squarely on nonfarm payrolls data for December, due later on Friday. The reading is expected to show more cooling in the labor market, although whether traders remained on edge over unexpected strength after stronger-than-expected weekly jobless claims and private payrolls data released earlier this week.
A cooling labor market and weaker inflation are the two key factors being considered by the Fed in trimming rates. While the two have cooled substantially in recent months, traders remained uncertain whether that would be enough to spur aggressive monetary easing by the Fed.
The CME Fedwatch tool showed that traders scaled back bets on a 25 basis point cut in March 2024- to a 62% chance from a 72% chance seen
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