Gold Consolidates Below $4,500 Ahead of Crucial US NFP Report
Gold prices have stabilized below $4,500 as investors await the release of the US Nonfarm Payrolls (NFP) report for clues on the Federal Reserve's policy path. The US Dollar has recouped some losses ahead of the crucial data, which will influence its price dynamics and provide direction to the non-yielding bullion.
According to TD Securities, the NFP report this Friday will be closely watched by markets grappling with the renewed hawkish tone from the Fed and the latest escalation in energy prices. However, the bank notes that looking forward, it does not anticipate material downside for precious metals amid a renewed dollar debasement theme.
US inflation risks stemming from higher energy prices have left the door open for a rate hike later this month. This has helped the US Dollar Index (DXY) bounce off its one-and-a-half-week low and cap the upside for gold.