Gold (XAU) Price Forecast: Will Jobs Data Push the Fed to Cut Rates and Lift Gold?

old Prices Swing as Traders Brace for Key Jobs Data and Fed Decisions

Gold prices closed a volatile week at $2,650.35, down 2.43%, as market drivers shifted between easing geopolitical tensions, a weaker dollar, and speculation over the Federal Reserve’s policy path. While early-week losses reflected profit-taking and reduced safe-haven demand, a late-week recovery highlighted persistent uncertainties ahead of pivotal U.S. jobs data and its implications for monetary policy.

Will Jobs Data Push the Fed Toward a Rate Cut?

The upcoming Non-Farm Payrolls (NFP) report, due Friday, is expected to heavily influence Federal Reserve expectations. Last month’s payrolls increased by just 12,000, significantly below forecasts, due largely to temporary disruptions like Hurricane Milton. This time, a rebound is likely, with consensus estimates suggesting job gains around 220,000 and an unemployment rate near 4.2%​.

If the report shows strong job growth and subdued unemployment, it could reduce the probability of a December rate cut. Such an outcome would strengthen the dollar and likely weigh on gold prices by raising the opportunity cost of holding non-yielding assets. Conversely, weaker-than-expected job numbers could bolster rate cut expectations, softening the dollar and supporting gold prices.

Is Inflation Stalling the Fed’s Next Move?

Core PCE inflation data, released last week, showed persistent inflationary pressures, complicating the Federal Reserve’s ability to move aggressively toward rate cuts. Nonetheless, expectations for easing remain, with market pricing showing a 66% likelihood of a 25-basis-point reduction in December​​.

The dollar’s performance will remain a critical factor. After declining midweek, the greenback ended November higher, buoyed by the prospect of prolonged elevated interest rates. If Friday’s jobs data fuels expectations of tighter Fed policy, further dollar strength could cap any potential gains for gold.

Can Geopolitical Risks Keep Gold Afloat?

While safe-haven demand was subdued earlier in the week due to optimism over ceasefire talks in the Middle East, persistent risks, such as the ongoing Russia-Ukraine conflict, offer a floor for gold prices. Heightened geopolitical tension could reignite demand for bullion, especially if market sentiment turns risk-averse​.

Where Are Gold Prices Headed Next Week?

In the near term, gold is likely to remain range-bound, with support hinging on soft U.S. economic data or heightened geopolitical risks.

A weak NFP report could push gold higher as traders price in a dovish Fed. However, robust job data might press prices lower. The weekly chart indicates a bullish bias could develop on a sustained move over $2663.51 and a bearish bias under $2631.04.

Traders should prepare for heightened volatility as the interplay between economic releases, Fed commentary, and geopolitical developments sets the tone for gold prices in the coming weeks.

More Information in our Economic Calendar.