Gold News: Traders Take Money Off the Table Ahead of Payrolls

Gold Retreats After Record High as Fed Rate Cut Bets Intensify

Gold prices pulled back on Thursday, falling from an all-time high of $3,578.66 reached the previous day, as traders booked profits ahead of key U.S. labor market data. The correction comes after a sharp rally driven by growing expectations of a Federal Reserve rate cut and deepening concerns about U.S. economic momentum.

Spot gold eased as traders shifted focus to Thursday’s jobless claims and the ADP private payrolls report, with the broader market eyeing Friday’s crucial non-farm payrolls print. The pullback is viewed as a technical pause, with near-term support seen at the previous high of $3,500.20.

Additional downside levels include the 50% retracement of the recent $3,311.56–$3,578.66 range at $3,445.11, followed by the 50-day moving average at $3,364.90.

Labor Market Weakness Fuels Rate Cut Expectations

ADP data showed private payrolls rose by just 54,000 in August, well below expectations for a 75,000 gain and down sharply from the prior month’s 106,000. Weekly jobless claims also increased to 237,000, above the forecast and suggesting further signs of labor market softness. On Wednesday, the Labor Department reported job openings had dropped more than expected to 7.181 million, a 10-month low.

These reports have significantly strengthened expectations for near-term Fed easing. Fed funds futures now price in a 97.4% probability of a 25 basis-point rate cut at the September 17 FOMC meeting, according to the CME FedWatch tool. Markets are also pricing in a total of 139 basis points of cuts by the end of next year.

Bond Yields Slide, Dollar Steady Ahead of NFP

Treasury yields continued to retreat, with the 10-year yield slipping to 4.18%, the 2-year at 3.60%, and the 30-year at 4.86%. The decline in yields followed weaker labor data and dovish commentary from several Fed officials, who signaled that labor market stress supports the case for lower rates. Meanwhile, the U.S. dollar index inched up to 98.23, while the yen weakened to 148.33, reflecting caution ahead of Friday’s jobs report.

Market Forecast: Bullish Gold Prices Outlook

Gold’s pullback appears technical, with underlying fundamentals remaining supportive. The mounting evidence of a weakening U.S. labor market, falling Treasury yields, and near-unanimous market expectations for a Fed rate cut this month all reinforce a bullish gold prices forecast.

As long as support at $3,445.11 holds, upside pressure is likely to resume, with a retest of the record high and a potential push toward $3,600 back on the table. Traders should remain alert to Friday’s non-farm payrolls data, which could serve as a fresh catalyst for gold’s next move.

More Information in our Economic Calendar.