The Gold Price Forecast remains flat, with the precious metal (XAU/USD) holding steady around the $4,080 mark in Friday’s early Asian session. The upside for gold is currently limited as a stronger-than-expected US employment report continues to dampen expectations for a Federal Reserve (Fed) rate cut in December.
However, traditional safe-haven flows and persistent central bank buying are providing a floor, suggesting some underlying support for the yellow metal.
🇺🇸 US Jobs Data Pushes Back Rate Cut Bets
The primary pressure point on the Gold Price Forecast is the recent US employment data, which showed unexpected resilience.
According to the Bureau of Labor Statistics (BLS) report released on Thursday, Nonfarm Payrolls (NFP) increased by 119,000 jobs in September. This figure significantly exceeded the market’s estimation of 50,000 jobs and followed a downwardly revised figure of only 4,000 jobs in August. The report, which was delayed due to the US government shutdown, signaled a solid jobs market.
Following this data, investors immediately scaled back their expectations for an interest rate cut from the Fed next month.
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The market is now pricing in approximately a 39% probability of a 25 basis points (bps) rate cut at the Fed’s December meeting, according to the CME FedWatch tool.
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The stronger US economy has, in turn, boosted the US Dollar (USD), which typically weighs on the USD-denominated gold price.
Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, noted the impact: “This (data) essentially confirms what the Fed discussed in October — a slowing yet stable jobs market. A December rate cut now appears increasingly unlikely,” he said, adding that this puts pressure on gold.
📈 What Could Support the Gold Price Forecast?
Despite the headwinds from the US job market, gold is finding support from two key areas:
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Safe-Haven Demand: Traders will be closely watching the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) and the Michigan Consumer Sentiment Index report, due later on Friday. Any signs of weakness or volatility in the US economy could quickly trigger safe-haven buying, boosting the Gold Price Forecast.
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Central Bank Buying: Major central banks continue their sustained accumulation of gold. Notably, the People’s Bank of China (PBOC) reported adding $1.2$ tonnes of gold in September and has maintained a purchase streak for the 12th consecutive month in October.
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