Gold edges lower as USD preserves its recent gains ahead of US NFP report

• Gold meets with a fresh supply on Friday amid an extension of the recent USD move up.
• Dovish Fed expectations might cap additional USD gains and support the precious metal.
• Geopolitical risks could further limit losses for the commodity ahead of the US NFP report.

Gold (XAU/USD) struggles to capitalize on the previous day's goodish rebound from the vicinity of the $4,400 mark and attracts fresh sellers during the Asian session on Friday. The US Dollar (USD) preserves its gains registered over the past two weeks and touches a nearly one-month high, undermining the commodity. However, dovish US Federal Reserve (Fed) expectations keep a lid on any further USD move up ahead of the highly anticipated US Nonfarm Payrolls (NFP), due later today, and help limit the downside for the non-yielding yellow metal.

The crucial US employment details would offer more cues about the Fed's rate-cut path, which, in turn, will play a key role in influencing the near-term USD price dynamics and providing a fresh directional impetus to the Gold. Heading into the key US data risk, rising geopolitical tensions could support the safe-haven precious metal. Nevertheless, the XAU/USD pair remains close to the all-time top touched in December, and the fundamental backdrop makes it prudent to wait for strong follow-through selling before positioning for any further losses.

Daily Digest Market Movers: Gold bulls seem reluctant amid a firmer USD ahead of US jobs data

• The US Dollar touches its highest level since December 10 during the Asian session on Friday and exerts some pressure on the Gold price amid some repositioning ahead of the key US Nonfarm Payrolls report.
• US Treasury Secretary Scott Bessent said on a CNBC interview on Thursday that lowering interest rates is the only ingredient missing for even stronger economic growth, which is why the Fed should not delay.
• Meanwhile, traders are pricing in the possibility that the US central bank will lower borrowing costs in March and cut rates again later this year. This could offer support to the non-yielding yellow metal.
• Traders, however, await more cues about the Fed's rate-cut path before placing fresh directional bets. Hence, the focus will remain glued to the release of the highly anticipated US monthly jobs data later today.
• The US economy is expected to have added 60K new jobs in December, down from 64K in the previous month, though the Unemployment Rate is seen edging lower to 4.5% from 4.6% recorded in November.
• In the meantime, heightened geopolitical uncertainties on the back of the US incursion in Venezuela, a diplomatic spat between China and Japan, and the protracted Russia-Ukraine war, might also support the XAU/USD pair.
• In a wide-ranging interview with The New York Times on Wednesday, President Donald Trump said that he expected the US would be running Venezuela and extracting oil from its huge reserves for years.
• Separately, China escalated its dispute with Japan, restricting exports of rare earths and rare-earth magnets to Japan. The ban follows the recent Taiwan-related remarks by Japan’s Prime Minister.
• German Chancellor Friedrich Merz said that an end to a nearly four-year war in Ukraine was quite far away, given Russia’s position, calling the plan for European troops to be deployed in Ukraine dangerous.

Gold bulls need to wait for acceptance above $4,500 before placing fresh bets

The XAU/USD pair holds above the rising 200-period Exponential Moving Average (EMA), currently pegged near $4,322.58, keeping the broader bias tilted higher. The average’s upward gradient underpins pullbacks. The Moving Average Convergence Divergence (MACD) line remains below the Signal line and beneath the zero mark, though it is turning higher. The negative histogram is contracting, suggesting fading bearish pressure.

RSI at 56 sits above the neutral 50 line, aligning with improving momentum without signaling overbought conditions. If momentum continues to firm, bulls could extend the recovery, while dips would be cushioned by the prevailing trend. Holding above $4,322.58 would preserve the bullish tone, whereas a decisive break below that average would open a deeper retracement.

(The technical analysis of this story was written with the help of an AI tool)