The price of gold futures increased by 0.35%, partially offsetting yesterday's drop (-1.04%). Meanwhile, since the beginning of the week, prices for the precious metal have fallen by 0.85%.
Experts said that gold has remained in a narrow range since November 27 due to the lack of new catalysts. However, today's US labor market data is likely to help gold break out of this range and provide new clues about the trajectory of the Fed's monetary policy. U.S. employment growth will probably rebound in November and will broadly be in line with analyst expectations, but given that the payrolls data have been volatile in recent months, there is plenty of scope for a surprise which would move gold prices. According to forecasts, in November, employment growth accelerated to 200 thousand from 12 thousand in October, and the unemployment rate increased by 0.1% to 4.2%. Meanwhile, the growth of average hourly earnings probably slowed to 0.3% m/m from 0.4% in October. On an annual basis, average hourly earnings are projected to increase by 3.9% after rising by 4% in October. But the Fed will be wary of placing too much weight on the expected steep rebound in payrolls in November, and until the unemployment rate drops to 4.0%, markets should be comfortable about leaning towards a rate cut this month. According to the CME FedWatch Tool, markets see a 70.3% probability of a 0.25% rate cut in December (compared to 66.0% a week ago), while the probability of an additional rate cut in January is only 18.0%. Lower interest rates increases the appeal of holding gold.