Gold (XAU/USD) kicks off the week on a cautious note, trading flat to slightly higher on Monday, as the US Dollar (USD) stabilizes but remains under pressure in the aftermath of Friday's disappointing Nonfarm Payrolls (NFP) report. At the time of writing, the yellow metal is hovering near $3,375 during American trading hours, having bounced from an intraday low of $3,345, as traders remain cautious amid fragile sentiment and shifting Federal Reserve (Fed) interest rate cut expectations.

July's jobs report delivered a clear downside surprise. The data has meaningfully increased the likelihood of a rate cut at the Federal Reserve's (Fed) next monetary policy meeting in September — a shift in sentiment after markets had recently scaled back expectations following last week's Fed decision to hold interest rates steady.

Despite the renewed dovish tilt in rate cut expectations, Gold's upside remains limited for now. US Treasury yields have stabilized after Friday's sharp decline, acting as a headwind and capping bullish momentum in the non-yielding metal.

However, growing concerns over political interference are adding a layer of caution to the market mood. US President Donald Trump abruptly fired Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer on Friday. Trump accused the BLS head of falsifying employment data after the July jobs report showed a steep slowdown in hiring and sharp downward revisions to previous months, all without providing any evidence.

President Donald Trump questioned the credibility of the latest jobs report, alleging that the figures were produced by a "Biden appointee" in an effort to make him and Republicans look bad. The move has sparked widespread criticism from economists and former officials, raising concerns over the credibility of future US economic data and the independence of core institutions. This political uncertainty is adding a layer of caution to the broader market tone and is helping to limit Gold's downside for now.

Source: Fxstreet