Gold slips slightly as the USD maintains its recent strength before the US NFP data release

Gold Faces Selling Pressure as US Dollar Strengthens Ahead of Jobs Data

Gold (XAU/USD) failed to build on its recent rebound near the $4,400 level, encountering renewed selling interest during Friday's Asian trading hours. The US Dollar has maintained its upward momentum from the past two weeks, reaching its highest point in nearly a month, which has weighed on gold prices. Despite this, expectations that the US Federal Reserve will adopt a dovish stance have limited further gains for the Dollar ahead of the much-anticipated US Nonfarm Payrolls (NFP) report due later today, helping to cushion gold’s downside.

Investors are closely watching the upcoming US employment figures, which are expected to provide clearer signals regarding the Fed’s potential interest rate cuts. These data points will likely influence short-term movements in the Dollar and could set the tone for gold’s next direction. Additionally, heightened geopolitical risks may offer some support to the safe-haven metal. Even so, gold remains near its record highs set in December, and the current market environment suggests waiting for a clear break lower before anticipating further declines.

Key Market Drivers: Gold Traders Cautious as Dollar Firms Before US Jobs Report

• The US Dollar reached its strongest level since December 10 during Friday’s Asian session, putting pressure on gold prices as traders adjust positions ahead of the crucial US Nonfarm Payrolls release.
• US Treasury Secretary Scott Bessent stated in a CNBC interview that lowering interest rates is the missing factor for stronger economic growth, urging the Fed not to delay rate cuts.
• Market participants are increasingly expecting the Federal Reserve to reduce borrowing costs in March, with further cuts anticipated later in the year—potentially providing support for gold.
• However, traders are waiting for more definitive signals on the Fed’s rate-cut trajectory before making new moves, keeping attention focused on today’s monthly jobs data.
• Forecasts suggest the US economy added 60,000 jobs in December, a slight decrease from November’s 64,000, while the unemployment rate is projected to dip to 4.5% from 4.6%.
• Geopolitical tensions—including US actions in Venezuela, escalating disputes between China and Japan, and the ongoing Russia-Ukraine conflict—may also bolster demand for gold as a safe haven.
• In an interview with The New York Times, President Donald Trump indicated expectations that the US would oversee Venezuela and tap into its vast oil reserves for years to come.
• Separately, China has intensified its disagreement with Japan by restricting exports of rare earths and related magnets, following recent comments by Japan’s Prime Minister regarding Taiwan.
• German Chancellor Friedrich Merz remarked that a resolution to the nearly four-year war in Ukraine remains distant, given Russia’s stance, and described plans for European troop deployments as risky.

Technical Outlook: Gold Bulls Await Break Above $4,500 for New Positions

Gold prices are currently holding above the rising 200-period Exponential Moving Average (EMA), which is situated near $4,322.58, supporting a generally bullish outlook. The upward slope of this average helps to limit pullbacks. The Moving Average Convergence Divergence (MACD) indicator remains below both its signal line and the zero threshold, but is beginning to turn upward, with the negative histogram shrinking—signaling that bearish momentum may be waning.

The Relative Strength Index (RSI) stands at 56, above the neutral 50 mark, indicating strengthening momentum without yet reaching overbought territory. If this momentum persists, gold could continue its recovery, while any declines are likely to find support from the prevailing trend. Maintaining levels above $4,322.58 would keep the bullish bias intact, whereas a decisive drop below this average could trigger a deeper pullback.

(Technical analysis in this article was generated with assistance from an AI tool.)