Gold continues to be supported by the Fed dovish USD selling bias.

The gold price (XAUUSD) extends its sideways consolidative price move below the weekly high reached the previous day, as traders choose to remain on the sidelines ahead of the critical US Nonfarm Payrolls (NFP) report later in the North American session. Meanwhile, mounting predictions for a greater interest rate decrease by the Federal Reserve (Fed) in September exert downward pressure on the US Dollar (USD) for the third straight day, offering Some support for the non-yielding yellow metal.

Worries about a US economic slowdown support the safe-haven metal.

Meanwhile, a mixed bag of job data reported this week from the United States (US) revealed that the labor market was slowing, raising concerns about the economy’s health. This, combined with ongoing geopolitical concerns, dampens investors’ desire for risky assets and serves as a tailwind for the safe-haven gold price. However, it would be advisable to wait for some follow-through buying before attempting to extend a two-day-old rally.

Daily Market Movers: Gold fails to build on weekly gains as traders turn cautious ahead of the US NFP.

The ADP National Employment Report, published on Thursday, showed that US private-sector employment grew 99,000 in August, the weakest gain since January, 2021.
The number was considerably below the market expectation of 145,000, and it was accompanied by a downward revision of the prior month’s print to 111,000 from 122,000 as previously reported.
This follows a report on Wednesday that job opportunities fell to 7.673 million, a three-and-a-half-year low in July, indicating a weakening labor market.
In August, the Institute for Supply Management’s (ISM) Services PMI edged up from 51.4 to 51.5, while the Prices Paid Index jumped to 57.3 from 57 and the Employment Index fell to 50.2 from 51.
Separately, the US Department of Labor (DoL) stated that Initial Jobless Claims decreased more than expected, to 227K in the week ending August 31, from the prior weekly The figure is 232K.
San Francisco Fed President Mary Daly stated that the US central bank must adjust policy to the changing economy and lower interest rates when inflation falls and the economy slows.
On Friday, Chicago Fed President Austan Goolsbee stated that the longer-term pattern of the job market and inflation data justifies relaxing interest-rate policy soon, followed by a gradual reduction over the next year.
According to the CME Group’s FedWatch Tool, the markets are pricing in a 40% possibility that the Fed would cut borrowing costs by 50 basis points at its September 17-18 meeting.

Traders are wary ahead of the release of critical US jobs data.

Meanwhile, dovish predictions keep the US Treasury bond yields depressed and the US Dollar bulls on the defensive, which, in turn, should operate as a tailwind for non-yielding gold prices.
The market’s attention now turns to the critical US Nonfarm Payrolls (NFP) report, which is likely to indicate that the economy added 160K jobs in August while the unemployment rate fell to 4.2%.