Gold prices eased as a resilient US economy and rising Fed rate hike expectations bolstered the Dollar, while conflicting reports on US-Iran diplomatic talks maintained a geopolitical risk premium.
The October NFP report showed 165K jobs added with 84K in upward revisions and unemployment down to 4.1%, pushing markets to price over an 80% chance of a December Fed rate hike. Mixed US-Iran diplomacy adds a safe-haven bid. This leaves the dollar supported, though traders are holding back ahead of the CPI release.
Gold is easing from the $4,150 resistance zone as a firming US Dollar and over 80% market-implied odds of a December Fed rate hike pressure bullion. Mixed Iran headlines still keep a geopolitical risk premium in play, capping the downside. The upcoming US CPI report is the decisive next trigger, so direction hinges on that data.
Gold (XAU/USD) retreated from the $4,150 resistance level as a stronger US Dollar pressured bullion. Markets are currently pricing in an 80% probability of a December Fed rate hike following strong October jobs data, which showed 165K payrolls added and unemployment falling to 4.1%.
Strong October employment figures and rising expectations of a Fed rate hike in December, plus safe-haven demand from Middle East uncertainty, are supporting the US Dollar.
Gold is being pressured by a firmer US Dollar as traders bet strongly on a December Fed rate hike after strong October jobs data, though tensions between the US and Iran still limit the decline.
The upcoming US CPI inflation report, which is expected to shape Fed policy expectations and give the next major push to gold's direction.