Gold price edges lower during the North American session on Thursday as the Greenback recovers some ground, even though the latest round of economic data increased speculation that the Federal Reserve may cut interest rates at the September meeting. The XAU/USD trades at $3,542, down 0.48%.

Bullion eases 0.48% despite weak US jobs data fueling near-certainty of a September Fed rate cut

The US economic docket revealed that the labor market continues to weaken after Initial Jobless Claims for the previous week rose. Other data showed that the trade deficit widened in July, while the Institute for Supply Management (ISM) Services PMI expanded at its fastest pace in six months.

Although the data is mixed, market participants had prioritized jobs data after the Fed Chair Jerome Powell acknowledged that the labor market is softening, at his Jackson Hole speech. Expectations that the Fed will reduce interest rates by 25 basis points (bps) are at 98%, according to the Prime Market Terminal interest rate probabilities tool.

During the day, the US Dollar continues to recover as traders book profits ahead of the Nonfarm Payrolls report, which is expected to show the economy added 75K new jobs to the labor market and that the Unemployment Rate would rose slightly to 4.3%.

Nevertheless, Gold traders need to be cautious due to uncertainty about US President Trump's policies, new tariffs, and the ongoing battle of his administration with Fed Governor Lisa Cook, who has been accused of committing mortgage fraud.

Further uncertainty around this case, and about the US Court of Appeals finding some of Trump's tariffs "illegal," could drive Gold prices higher.

Source: Fxstreet