Gold consolidates as traders brace for US NFP

LONDON (January 9) Gold (XAU/USD) trades little changed on Friday as markets turn cautious ahead of the US Nonfarm Payrolls (NFP) report due at 13:30 GMT. At the time of writing, XAU/USD trades around $4,470, consolidating after bouncing from the $4,400 region on Thursday.

Renewed strength in the US Dollar (USD) and rising US Treasury yields are also weighing on Bullion, keeping upside momentum in check. Still, XAU/USD remains up over 3% so far this week, underpinned by elevated geopolitical tensions.

The upcoming US labour-market report is expected to provide fresh cues on the Federal Reserve’s (Fed) monetary policy path for 2026. Economists expect the US economy to add around 60,000 jobs in December, while the Unemployment Rate is forecast to edge lower to 4.5% from 4.6%

A stronger-than-expected jobs report could reinforce the view that the Fed can afford to remain patient. By contrast, a downside surprise would strengthen bets on interest rate cuts later this year. It could also revive some rate-cut expectations around the Fed’s January 27-28 meeting, even as policymakers are widely expected to keep rates unchanged.

Gold typically benefits from a lower-interest-rate environment, as falling yields reduce the opportunity cost of holding the non-yielding metal.

Market movers: Markets eye geopolitical risks, tariff ruling and Fed leadership headlines

• Markets remain focused on rising geopolitical risks after the United States expanded its oversight of Venezuelan Oil exports, following military actions in Caracas. Sentiment has also been unsettled by fresh controversial remarks from US President Donald Trump about annexing Greenland. Elsewhere, growing unrest in Iran and renewed frictions involving Japan and China are adding to a cautious mood, keeping risk appetite fragile and underpinning demand for Gold.
• US President Donald Trump posted on Truth Social on Friday that Venezuela is releasing political prisoners and that the US is working with Caracas to rebuild its oil and gas sector. He added that a planned second wave of attacks has been cancelled, though US ships will remain in place “for safety and security.” Trump also said he will meet major oil executives at the White House today and that around $100 billion could be invested.
• Attention is also on a US Supreme Court hearing later on Friday over the legality of President Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Lower courts have previously ruled that the administration exceeded its authority in imposing sweeping tariffs.
• Markets are also watching headlines around the next Federal Reserve Chair. The New York Times reported that President Trump said he has “a decision in mind” but has not discussed it yet. Treasury Secretary Scott Bessent later said Trump has not interviewed one of the four final candidates and that the announcement could come around his Davos trip in two weeks.
• On the data front, releases on Thursday showed that Initial Jobless Claims rose modestly to 208,000 in the week ended January 3, slightly below market expectations of 210,000, while Challenger job cuts fell to 35,553 in December, the lowest level since July 2024. Elsewhere, the US trade deficit narrowed sharply to $29.4 billion in October, the smallest since June 2009 and well below the $58.1 billion forecast.

FXStreet