Gold prices were flat at around $4,205 per troy ounce at the start of Friday's Asian session. Rising US government bond yields and still-strong employment data prevented gold from rising further. Many market participants opted for a wait-and-see approach ahead of the release of key US inflation data, the September PCE Price Index, scheduled for release today. This data is considered key to determining the Fed's future policy direction.

Higher bond yields and strong employment data typically support a stronger US dollar, which tends to pressure dollar-denominated commodity prices, including gold. Recent data showed that US initial jobless claims fell to 191,000, well below the 220,000 expected. This figure signals that the US labor market remains solid, so market participants are increasingly focusing on the PCE data to see whether inflationary pressures will force the Fed to be more cautious about cutting interest rates.

Despite this, the market still expects the Fed to cut its benchmark interest rate by 25 bps at its December meeting next week. Lower interest rates typically reduce the opportunity cost of holding gold, thus supporting the price of this precious metal in the medium term. On the other hand, geopolitical uncertainties, such as the conflict in Ukraine, can also increase interest in safe-haven assets. US President Donald Trump himself acknowledged that the path to peace in Ukraine remains unclear, while dialogue with Russia and Ukraine is said to continue—conditions that make gold attractive as a hedge. (az)

Source: Newsmaker.id