Solid Gold Berjangka - Gold prices (XAU/USD) weakened to around US$4,055 per troy ounce during the early European session on Friday (November 6). The pressure stems from the US dollar’s continued recovery from its lowest level since late September, while the Federal Reserve’s persistently hawkish stance has pushed gold away from the two-week high reached just a day earlier.
Market attention is now focused on the US Nonfarm Payrolls (NFP) report. The economy is expected to have added 65,000 jobs in October—an increase from the 29,000 jobs added the previous month—while the unemployment rate is projected to remain steady at 4.2%.
Investors will also be closely monitoring data on Average Hourly Earnings, as wage growth could influence expectations regarding Federal Reserve policy. Strong labor market data has the potential to bolster the US dollar, thereby increasing pressure on gold.
Meanwhile, the Democratic Party's victory in the US midterm elections has sparked concerns over a potential slowdown in the development of artificial intelligence, driving demand for safe-haven assets. However, a rebound in oil prices has reignited inflation concerns, and the market continues to price in a roughly 70% probability of a Federal Reserve interest rate hike in December.
Geopolitical risks also remain a point of concern, following President Donald Trump’s renewed, stern rhetoric toward Iran. Tensions surrounding Iran’s nuclear program and the Strait of Hormuz have the potential to trigger market volatility. Despite the current pressure, gold has managed to hold above the psychological US$4,000 level and remains on track to record its first weekly gain in three weeks. (srh)