Gold prices (XAU/USD) traded in a tight range around $2,650.00 during the European session on Thursday (5/12). The precious metal struggled to find direction as investors have been sidelined ahead of the United States (US) Nonfarm Payrolls (NFP) data for November, due for release on Friday.
The labor market data will significantly influence market expectations for the Federal Reserve's (Fed) likely interest rate decision at its monetary policy meeting on December 18. Financial market participants currently expect the Fed to cut interest rates by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool.
Economists estimate the US economy added 200,000 new jobs, much higher than the 12,000 in October. The NFP report noted that payroll employment estimates in several industries were affected by last month's hurricanes. The Unemployment Rate is expected to rise to 4.2% from the previous release of 4.1%. Investors will also be looking at the US Average Hourly Earnings data for clues on the current status of wage growth.
Gold price declines are expected to remain well supported amid tensions between Russia and Ukraine. Historically, the appeal of Gold prices has strengthened amid rising geopolitical tensions.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, fell near 106.20. The 10-year US Treasury yield rose near 4.21%.
Source: FXStreet
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