Gold Prices Nears $2,645; Strong U.S. NFP Data and Shifting Fed Rate Expectations

The recent payrolls data indicated solid job growth, prompting traders to scale back bets on another 50 basis point (bps) cut in the Fed’s November meeting. The latest estimates show an over 90% probability of a smaller, 25 bps rate cut, according to CME’s FedWatch Tool. This change in expectations has boosted both the U.S. dollar and Treasury yields, exerting additional pressure on gold prices.

We can see the 4H chart and the current range, also after the NFP on Friday, we say Gold prices pump after the initial reaction from the data, and the reaction from the Resistance lvl on the 30min INTRADAY chart candlestick confirms our bias. https://t.co/mTzNwmmEPh pic.twitter.com/CiZ08Rz9H3

— Bendra Banks (@KvngBendra) October 6, 2024

Fed Commentary and CPI Data in Focus This Week

Traders are now focusing on several key Fed officials’ speeches and the minutes from the central bank’s September meeting for more clues on interest rate movements. Furthermore, the release of U.S. Consumer Price Index (CPI) inflation data later this week is likely to influence the outlook for future rate decisions.

A combination of these factors will determine the strength of the dollar and Treasury yields, which could either support or weigh down gold prices in the near term.

Gold prices remain in a tight range as traders await the US Non-Farm Payrolls (NFP) report for the next big move. Will this key data provide the spark for a breakout? #Gold #XAUUSD #NFP #MarketUpdate#fxdailynews @tradetendtimes

— Tradetrendtimes (@tradetendtimes) October 5, 2024

Impact on Other Precious Metals and Commodities

Other precious metals followed gold’s downward trend. Platinum futures dropped by 0.5% to $997.05 per ounce, while silver futures edged down 0.1% to $32.36 per ounce.

In contrast, copper prices showed some stability after fluctuating significantly last week. Benchmark copper futures on the London Metal Exchange steadied at $9,972 per ton, buoyed by expectations of more stimulus measures from top importer China.

Key Takeaway Points:

• Strong U.S. payroll data diminishes the likelihood of a 50 bps Fed rate cut, pushing gold lower.

• Focus shifts to Fed speeches and CPI data for clearer market direction.

• Other precious metals and copper follow gold’s lead, with China stimulus measures in focus.

Conclusion: Gold remains in a consolidation pattern, and its short-term outlook hinges on U.S. economic data and Fed commentary. A breakout above $2,658 could trigger a bullish rally, while a dip below $2,643 may lead to further declines.