By Hani Abuagla, Senior Market Analyst at XTB MENA
Gold edged lower on Thursday but remained above the USD 4,000 threshold, pressured by a cautious tone in the Federal Reserve’s latest minutes. The document showed policymakers were divided over whether weakness in the labor market or persistent inflation posed the greater risk, reinforcing the message that a December rate cut is far from guaranteed. Market-implied odds for a cut fell to around 33%, down from nearly 50% earlier in the week, reflecting investors’ reassessment of the policy outlook.
The minutes highlighted a clear split. While several officials were open to reducing rates again if economic conditions softened, many argued that further cuts may not be justified this year.
Even so, downside pressure on gold could remain limited as persistent tensions in the Middle East and Eastern Europe continue to underpin safe-haven demand. At the same time, diplomatic developments could introduce a layer of unpredictability. President Donald Trump has approved a 28-point framework aimed at ending the Russia-Ukraine conflict. Any credible breakthrough could lift risk appetite and weigh on bullion.
Attention now turns to today’s NFP release, which could affect expectations. A weak print would likely revive bets on December easing and support gold, while a resilient labour market could reinforce a “no-cut” scenario and expose the metal to a potential break below the USD 4,000 level.