Gold Price Holds Steady at $4,180 as NFP Report Takes Center Stage

The gold price has been trading in the $4,180s due to the Federal Reserve's decreased likelihood of an October rate hike. This decision was influenced by recent U.S. inflation data that showed a softer inflation reading.

Fed Funds Futures now price in an October rate hike at about 12% probability, but the jobs report will likely be the main factor determining the Fed's next move. The gold price may still be impacted by the U.S. dollar, which could trend upward due to elevated Treasury yields.

The recent inflation data has given gold some monetary relief, with the PCE data coming in under expectations and previous revisions taking some stress off of gold. However, the investing community still expects the Fed to keep rates elevated through the end of 2022, which will continue to restrain the economy and support the price of gold.

The U.S. Non-Farm Payrolls report is now the main catalyst for gold, with consensus estimates expecting a creation of 90,000 jobs in September. A worse-than-expected report could solidify the belief that the Fed can wait to raise rates, decreasing U.S. dollar strength and allowing gold to strengthen.