Gold hovers close to $4,455 as yields climb and the US Dollar rebounds

Gold Holds Steady as US Treasury Yields and Dollar Strengthen

On Thursday, gold prices remained close to their opening levels after briefly dipping to $4,407, as rising US Treasury yields and a stronger US Dollar put pressure on the metal. Recent US economic reports have painted a more optimistic picture for the labor market, just ahead of the highly anticipated December Nonfarm Payrolls release. Currently, XAU/USD is trading at $4,455, showing little movement from earlier in the day.

Gold Pauses as Investors Await US Jobs Data and Dollar Gains Momentum

The US Dollar has begun to recover, buoyed by employment data indicating that job losses in November were halved compared to previous months. Initial Jobless Claims came in lower than forecasts, despite a slight increase from the prior week. Additionally, a significant reduction in the US trade deficit has further supported the Dollar’s rally.

The US Dollar Index (DXY), which measures the Greenback against six major currencies, has risen 0.20% to 98.92, surpassing the 200-day Simple Moving Average at 98.87. However, Dollar bulls will be looking for a daily close above this level to confirm a sustained rebound.

Meanwhile, the New York Fed’s latest consumer survey indicated that both inflation expectations and perceptions of the job market worsened in December.

Looking ahead, money markets are now factoring in 56 basis points of rate reductions by the Federal Reserve in 2026.

Key US Economic Events for January 9

Investors are closely watching Friday’s Nonfarm Payrolls report, which is expected to show an increase of 60,000 jobs in December, slightly below November’s 64,000. The unemployment rate is forecast to edge down from 4.6% to 4.5%.

Market Highlights: Robust US Employment Data Limits Gold’s Upside

• Initial Jobless Claims for the week ending January 3 reached 208,000, beating expectations of 210,000 but rising from the previous week’s 200,000. The data, alongside December’s Challenger Job Cuts report showing 35,553 layoffs—about half of November’s total—suggests the labor market is strengthening.
• Andy Challenger, Chief Revenue Officer at Challenger, Gray & Christmas, noted, “The year ended with the lowest number of announced layoffs in 2023. December is usually quiet, but increased hiring plans are a positive sign after a year marked by significant job cuts.”
• The US trade deficit in goods and services narrowed sharply from $48.1 billion to $29.4 billion in October, outperforming expectations for a widening deficit, largely due to a drop in imports, especially pharmaceuticals.
• The New York Fed’s Survey of Consumer Expectations revealed that short-term inflation expectations rose, while medium-term expectations remained steady. However, consumers felt less optimistic about finding jobs and more concerned about potential job losses.
• Inflation expectations for one year increased to 3.4% from 3.2%, while three- and five-year outlooks held steady at 3%.
• Following the latest economic data, the Atlanta Fed’s GDP Now estimate for Q4 2025 jumped from 2.7% to 5.4%.
• Gold prices declined as US Treasury yields climbed. The yield on the 10-year note increased by nearly 2.5 basis points to 4.173%, while real yields—typically moving inversely to gold—rose by 2 basis points to 1.903%.

Gold Technical Outlook: Consolidation Near $4,450

The upward trend in gold prices remains intact, but a daily close below Wednesday’s low of $4,423 could trigger a move toward the $4,400 level. Bullish momentum is waning, as indicated by a flat Relative Strength Index (RSI) that still sits above its neutral point.

For gold to resume its upward trajectory, prices need to reclaim the $4,500 mark, potentially opening the door to challenge the record high of $4,549, with $4,600 as the next target. Conversely, if XAU/USD falls below $4,400, the first support is at the 20-day Simple Moving Average of $4,376. A break below this could expose $4,300, and further weakness may threaten the broader uptrend if prices dip under the recent cycle low of $4,274.