Gold price has unable to gain meaningful traction despite contradictory underlying signs.

The gold price (XAUUSD) remained on the defensive during the Asian session on Friday. But managed to keep its neck above a roughly one-month low reached earlier this week. Traders choose to remain on the sidelines. Ahead of the release of the much awaited US monthly jobs data, generally known as the Nonfarm Payrolls (NFP) report, seeking clues regarding the Federal Reserve’s (Fed) rate-cut path and Before placing new directional bets. Heading into the big data risk, a mix of diverging forces fails to provide any meaningful impetus to the precious metal, which is expected to continue its consolidative price move in a multi-day trading range.

The Fed’s less aggressive stance pushes the USD to a multi-week low while providing support.

Despite persistently high inflation in the United States, Fed Chair Jerome Powell ruled out future interest rate increases. This, in turn, lowers the US Dollar (USD) to a three-week low and serves. As a tailwind for the non-yielding Gold price. However, the Fed has indicated that it is not in a hurry to decrease interest rates in the near future. Aside from this, the prevailing risk-on climate  as reflected by a generally favorable tone around the equity markets prevents traders from placing new bullish wagers around XAUUSD is considered a safe haven. As a result, a sustained break of a short-term trading range is required to forecast the metal’s near-term direction.

Daily Market Movers: Gold price fails to gain traction, traders await clues on Fed’s rate cutting path.

Expectations that the Federal Reserve would keep interest rates higher for longer. Combined with an upbeat market mood, appear to be important factors hurting demand for the safe haven gold price.
The Fed hinted on Wednesday that the next step would be to drop the policy rate. But it was not in a hurry to start decreasing borrowing costs because the disinflationary process has slowed in recent months.

Bets on a delayed Fed rate cut and a positive risk tone have capped gains ahead of the US NFP.

The Fed’s less aggressive perspective has led to broad-based US Dollar weakening. Which helps limit the risk for the XAUUSD, requiring some care before positioning for any significant decline.
Traders may alternatively want to wait for the release of the carefully awaited US monthly employment report, or NFP. Which is expected to reveal that the economy added 243K new jobs in April.
Meanwhile, the unemployment rate is expected to stay stable at 3.8% during the reported month, with average hourly earnings likely falling to 4.0% YoY from 4.1% in March.
The critical jobs report may influence market expectations about the Fed’s future policy actions, thereby driving the USD and providing some substantial push to the non-yielding metal.