Gold price (XAU/USD) drifts lower during the Asian session on Thursday and moves away from a four-week top, around the $2,670 area touched the previous day. The US Dollar (USD) stands firm near a two-year peak touched last week in the wake of the Federal Reserve's (Fed) hawkish shift, which, in turn, is seen as a key factor undermining the non-yielding yellow metal. In fact, the Fed indicated that it would slow the pace of interest rate cuts in 2025 amid a still resilient US economy, signs that the US labor market remained robust and sticky inflation.

That said, concerns about US President-elect Donald Trump's protectionist policies and persistent geopolitical risks could offer some support to the safe-haven Gold price. The flight to safety leads to a modest pullback in the US Treasury bond yields, which holds back the USD bulls from placing fresh bets and might further contribute to limiting the downside for the XAU/USD. This warrants some caution before positioning for deeper losses as traders await the release of the closely-watched US monthly jobs data, or the Nonfarm Payrolls (NFP) report on Friday.

Gold price is pressured by the prospects for slower rate cuts by the Fed; downside seems limited
Automatic Data Processing (ADP) reported that private sector payrolls in the US rose by 122,000 in December, well below November's increase of 146,000 and missing expectations of 140,000.
A separate Labor Department report showed Initial Jobless Claims stood at 201,000 in the week ending January 4, marking the lowest reading since February 2024 and pointing to a stable labor market.
Minutes of the December FOMC meeting showed that policymakers viewed labor market conditions as gradually easing and were in favor of slowing the pace of rate cuts amid stalling disinflation.

The yield on the benchmark 10-year US government bond shot to its highest level since April 25 on Wednesday, assisting the US Dollar to stand firm near a two-year top and undermining the Gold price.
CNN reported that US President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries.
Ukrainian troops endured significant manpower losses in the face of Russia's relentless assault. Russia's Defence Ministry said that its forces defeated Ukrainian brigades in Seversk and Chasov Yar.

Israeli airstrikes continued across the West Bank on Wednesday in the wake of an attack that killed three Israelis on Monday. The Israeli military recovered the body of a hostage from southern Gaza.
Investors now look to speeches by a slew of influential FOMC members for short-term impetus later during the US session, though the focus will remain glued to the US Nonfarm Payrolls on Friday.