By Daniel Takieddine, Co-founder and CEO, Sky Links Capital Group
Gold retreated on Friday, set to close the week in negative territory after two consecutive weekly gains, as diminishing expectations of a December Federal Reserve rate cut weighed on sentiment. The long-awaited US employment report showed nonfarm payrolls rising by 119,000 in September, more than double the consensus estimate of 50,000, while the lack of data for October added to the uncertainty over the decision of a data-driven Fed.
The unemployment rate ticked up to 4.4%, the highest since late 2021, while wage growth surprised slightly on the upside at 3.8%, painting a mixed picture of the labor market. Adding to the pressure on gold, several Fed officials echoed a cautious tone, leading markets to price with a one-third probability of a December cut.
Geopolitical risks could also contribute to the uncertainty. In the Middle East, tensions remain elevated. In Eastern Europe, uncertainty persists around the prospects of a ceasefire. If successful, the recent peace framework could reduce demand for safe-haven assets.