Gold holds steady as investors await US non-farm payrolls

Gold Holds Steady as Markets Await US Jobs Data

Gold prices (XAU/USD) remained largely unchanged on Friday, with investors adopting a cautious stance ahead of the release of the US Nonfarm Payrolls (NFP) report scheduled for 13:30 GMT. At the latest check, XAU/USD hovered near $4,470, consolidating after rebounding from the $4,400 area on Thursday.

Gains in the US Dollar and higher US Treasury yields have put some pressure on gold, limiting its upward movement. Nevertheless, the metal has advanced over 3% this week, supported by ongoing geopolitical tensions.

The forthcoming US labor market data is anticipated to offer new insights into the Federal Reserve’s (Fed) policy direction for 2026. Analysts predict that around 60,000 new jobs will be added in December, with the unemployment rate expected to dip to 4.5% from 4.6%.

If the jobs report exceeds expectations, it could reinforce the belief that the Fed will maintain its current stance for longer. Conversely, weaker data may boost expectations for rate cuts later in the year, and could even revive speculation about policy easing at the Fed’s January 27-28 meeting, despite widespread forecasts for rates to remain steady.

Gold often benefits when interest rates fall, as lower yields decrease the opportunity cost of holding the non-yielding asset.

Key Market Drivers: Geopolitical Tensions, Tariff Developments, and Fed Leadership News

• Investors are closely monitoring escalating geopolitical risks, particularly after the US increased its oversight of Venezuelan oil exports following military activity in Caracas. Market sentiment has also been unsettled by recent controversial statements from US President Donald Trump regarding the possible annexation of Greenland. Additional concerns stem from unrest in Iran and renewed tensions between Japan and China, all of which have heightened caution and supported demand for gold.
• President Trump announced on Truth Social that Venezuela is releasing political prisoners and that the US is collaborating with Caracas to revitalize its oil and gas industry. He also mentioned that a planned second wave of attacks has been called off, although US naval forces will remain deployed for security. Trump is set to meet with leading oil executives at the White House, with potential investments of up to $100 billion under discussion.
• Attention is also turning to a US Supreme Court session later on Friday, which will address the legality of tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). Previous lower court rulings have found that the administration overstepped its authority with these broad tariffs.
• Markets are keeping an eye on developments regarding the next Federal Reserve Chair. According to the New York Times, President Trump has a preferred candidate in mind but has not yet made a public announcement. Treasury Secretary Scott Bessent indicated that Trump has not interviewed all four finalists, and the decision could be revealed around his upcoming trip to Davos in two weeks.
• Recent data showed that Initial Jobless Claims rose slightly to 208,000 for the week ending January 3, just under the forecast of 210,000. Challenger job cuts dropped to 35,553 in December, marking the lowest level since July 2024. Additionally, the US trade deficit narrowed sharply to $29.4 billion in October, the smallest since June 2009 and well below the projected $58.1 billion.

Technical Outlook: Gold Consolidates Below $4,500 Before NFP Release

Technically, XAU/USD is in a consolidation phase ahead of the US Nonfarm Payrolls report, stabilizing after its recent surge. The overall trend remains positive, with prices staying above the ascending 21-day Simple Moving Average (SMA) near $4,387.

On the support side, the $4,400–$4,380 range is the first significant level to watch. A drop below this zone could expose the 50-day SMA near $4,231, potentially leading to a deeper correction.

Resistance is found at $4,500. A decisive move above this barrier would bring the record high near $4,549 back into focus, with the possibility of further gains.

The Relative Strength Index (RSI) is currently around 62, remaining above the midpoint and signaling continued bullish momentum. Meanwhile, the Average Directional Index (ADX) at 28.68 points to a moderate trend, which has eased from previous highs, indicating a slower pace of movement.