Gold Prices Hinge on US Nonfarm Payrolls Data Release
Gold prices have been hovering around $4,172.49 in Asia on Friday after failing to regain $4,200 earlier this week.
Traders are eagerly awaiting the US Nonfarm Payrolls (NFP) data for September, which could significantly alter market expectations for an October Federal Reserve interest rate hike and impact the US Dollar valuation and Gold's next major move.
The non-yielding bullion is torn between energy-driven inflation risks that have sent US Treasury bond yields to multi-year highs and receding bets on another rate hike this month along with recent dovish commentary from two key Fed policymakers.
While the benchmark US 10-year Treasuries touched 5.344% on Thursday, their highest since 2002, markets now price in just a 25% chance that the Fed will hike rates later this month, down sharply from about 70% seen at the start of this week.
The next clear directional move in Gold hinges on the upcoming top-tier US NFP release, with traders focusing on two potential scenarios for trading Gold on the NFP release: a bearish case where NFP beats 100,000 and an October hike is supported, or a bullish scenario where payrolls fall below 50,000 and an October hike is off the table.