XAU/USD Climbs to Fresh Heights Near $4,110 Ahead of Crucial US Employment Data

Gold price continues its upward trajectory, trading near $4,110 during Thursday’s early Asian trading session. The precious metal has attracted fresh buying interest as market participants grapple with heightened uncertainty surrounding the American economic landscape.

US Employment Report Takes Center Stage

The delayed September Nonfarm Payrolls report will be released later Thursday following a 43-day government shutdown that postponed the initial announcement. This highly anticipated jobs data has become a critical barometer for assessing labor market resilience and will likely influence monetary policy expectations moving forward.

The extended absence of official employment figures has created information gaps, leaving the Federal Reserve with incomplete labor market assessments during a period of policy deliberation. Investors now await concrete data that could reshape current market positioning across multiple asset classes, including precious metals like gold.

Fed’s Mixed Signals Complicate Rate Outlook

Recent minutes from the Federal Open Market Committee’s October 28-29 gathering revealed that policymakers hold divergent views regarding the appropriate interest rate trajectory. Although the committee approved a 25 basis point reduction, the decision was far from unanimous, with certain members expressing reservations about additional cuts in December.

This policy uncertainty has translated into shifting market expectations. The CME FedWatch tool indicates that traders now assign approximately 30% odds to a December rate cut, representing a significant retreat from the roughly 60% probability quoted just seven days earlier. Such recalibration reflects cooling expectations around near-term monetary easing.

How Rate Expectations Impact Gold

The relationship between interest rates and gold prices remains inverse yet compelling. Should the delayed jobs report disappoint relative to forecasts, it could reinvigorate bets on December easing, potentially lifting the non-yielding precious metal higher. Reduced real rates diminish the opportunity cost of holding gold, typically supporting prices.

Conversely, if momentum builds behind fewer rate cuts ahead, downward pressure could emerge on gold price levels. The current positioning reflects this delicate balance—traders are hedging between cautious optimism on labor market weakness (supportive for gold) and fading rate-cut enthusiasm (bearish for the yellow metal).

The path forward for XAU/USD will largely depend on how Friday’s employment snapshot reshapes the Fed rate-cut narrative and whether sentiment around economic resilience shifts in the coming sessions.