Gold struggles below $4,100 as the US Dollar gains 0.40% ahead of today's jobs report, while equity market volatility forces investors to liquidate positions.
The Dollar Index trades around 102.00, up 0.40% on the day, and the Dollar was the strongest major currency against the New Zealand Dollar. Today's Nonfarm Payrolls at 13:30 GMT, with 65K jobs expected versus 29K in September, could reinforce December rate-hike bets if it beats, supporting further Dollar strength; a soft print would temper those expectations.
The October Nonfarm Payrolls report at 13:30 GMT: consensus is 65K new jobs versus 29K in September, and a stronger figure would boost expectations of a December Fed rate hike, supporting the Dollar.
WTI is down around 12% this week after the Democratic sweep in the US midterm elections fuelled expectations that lawmakers could curb President Trump's military campaign against Iran, which would ease the supply/inflation premium built up since the war began in late February. However, a negotiated end to the conflict still appears distant and Trump said the US may have to 'destroy' the rest of Iran, and oil has already recovered some ground, capping the downside.
WTI is down around 12% this week because the Democratic sweep in the US midterms raised expectations that Congress could curb President Trump's military campaign against Iran, easing the war-related pressure on prices.
Gold prices retreated to $4,065 on Friday as a resurgent US Dollar pressured the non-yielding metal ahead of the critical October Nonfarm Payrolls report. Markets anticipate 65,000 new jobs, with strong data likely to bolster expectations for a December Federal Reserve rate hike. Meanwhile, liquidity-driven selling amid an equity market downturn continues to weigh on bullion sentiment.
Stronger-than-expected jobs data suggests a resilient labor market, allowing the Fed to maintain hawkish policies. This typically strengthens the US Dollar and increases interest rate expectations, which puts downward pressure on non-yielding assets like Gold.
The ongoing AI-led sell-off in equities has forced investors to liquidate profitable or liquid positions, including gold, to raise cash and meet margin calls resulting from losses in other asset classes.