Gold Prices Steady Ahead of Crucial US Nonfarm Payrolls Report

Gold prices were steady on Friday after rising for two consecutive days, ahead of the eagerly anticipated US Nonfarm Payrolls (NFP) report. The precious metal briefly touched $4,500 on Thursday, gaining nearly 2% due to a weaker US Dollar and lower Treasury yields. However, as traders wait for the NFP release at 12:30 GMT, they appear hesitant to take new positions.

Fed Governor Christopher Waller's comments earlier this week sparked a shift in market expectations, with rate hike bets decreasing from around 63% to approximately 50%. A stronger-than-expected NFP report could revive these bets and push the US Dollar and Treasury yields higher, potentially weighing on gold prices. Conversely, another weak payroll reading may strengthen the case for the Fed to keep rates unchanged, allowing gold to reclaim the $4,500 mark.

Analysts at OCBC remain constructive on gold but caution that its near-term path will be highly sensitive to Fed repricing. They highlight that payrolls tonight may drive the next move in yields and the US Dollar, while next week's CPI and PPI data should provide more clarity on the recent disinflation trend.