Gold prices rose modestly in early Friday trading, remaining below $4,200 per ounce as traders await the release of US non-farm payrolls later today. The precious metal is recovering some of the ground lost earlier in the week, helped by a slight easing in US Treasury yields, although a strong dollar continues to limit the potential for further gains. Expectations of an imminent interest rate hike by the Federal Reserve have declined significantly following softer-than-expected US inflation data and cautious comments from Fed officials, but markets continue to price in the possibility of further tightening before the end of the year. Against this backdrop, today’s employment report could prove decisive for the short-term direction of gold. A stronger-than-expected reading could revive expectations of an October rate hike, supporting the dollar and yields and putting renewed pressure on bullion. Conversely, signs of a cooling labour market could reinforce expectations that the Fed will remain on hold for now, potentially offering further support to gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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