Gold Poised for Move Amid Robust Fed Cut Hopes and Heavy US Data Calendar

AsianForexHub Market Pulse

• Gold recorded a small gain on Thursday amid robust expectations of a Fed rate cut.
• The probability of a quarter-point rate cut at next week’s Fed meeting remains high, around 85%.
• Employment data mixed: Highest layoffs since 2022 (Challenger), but weekly unemployment claims fell to 189,000.
• Reuters review expects a Fed rate cut in December.
• The market is now focused on the release of the Core PCE Index.

Bullion recorded a small gain on Thursday’s trading despite the latest employment data in the United States showing signs of resilience, thus strengthening expectations that the Federal Reserve (Fed) will cut interest rates by the end of the year.

Get instant gold buy/sell signals ahead of the Core PCE release and the Fed rate decision.

Sentiment Remains Mixed Following US Employment Data

Market sentiment remains mixed after US economic data showed the labor market is slowing. The Challenger Job Cuts report recorded the highest number of layoffs since 2022, while weekly unemployment claims fell to a low of 189,000.

Rate cut expectations remain robust with approximately 85% probability of a quarter-point interest rate reduction at the Fed’s meeting next week. This confidence was also driven by the weaker-than-expected ADP National Employment Change report, after private companies reportedly cut 32,000 jobs last month.

A Reuters review also showed that most economists expect a rate reduction at the December meeting, thus lending support to gold prices, which typically benefit in a low-interest-rate environment.

At 9:30 am, the price of gold was at the $4,201 level, down 0.18% compared to the opening of the Asian session on Friday.

Attention Shifts to Core PCE

Next, market attention is focused on the release of the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Index for September. This critical data release has the potential to confirm the Fed’s need to ease policy, which is traditionally an opportunity for precious metals to move higher.

Track the Core PCE release live and understand its implications for inflation and the Fed’s decision.