Gold (XAU/USD) experienced renewed selling pressure during the Asian session on Friday, although the downside was limited as traders awaited the release of the US Nonfarm Payrolls (NFP) report for September. The NFP is expected to show an increase of only 90,000 jobs, down from 162,000 in the previous month, while the Unemployment Rate is projected to remain steady at 4.1% [1]. Market participants are also closely monitoring annual wage inflation, as measured by Average Hourly Earnings, for further clues on the Federal Reserve's future policy direction, especially as expectations for an October rate hike have receded [1].
Recent comments from several influential FOMC members indicated no urgent need for an immediate interest rate hike following the anticipated quarter-point increase at the September meeting [1]. Meanwhile, the Institute for Supply Management (ISM) reported that US manufacturing activity expanded for the ninth consecutive month in September, with raw material prices rising for the 24th straight month, adding to inflationary concerns [1]. These factors, combined with volatile energy prices, are supporting the prospect of further Fed tightening and have helped limit the pullback in US bond yields from multi-year highs [1].
Geopolitical risks remain elevated, with reports that the Pentagon may soon deploy a third aircraft carrier strike group and 10,000 sailors and Marines to the Persian Gulf, and incidents of tanker attacks in the Strait of Hormuz as reported by Iran’s Persian Gulf Strait Authority [1]. US President Donald Trump stated he would decide soon on potential military action against Iran, further supporting the safe-haven appeal of the US Dollar, which is trading near its highest level since April 2025 [1]. This strong Greenback continues to act as a headwind for gold, although the lack of follow-through selling suggests caution for bearish traders [1].
Technical analysis shows XAU/USD maintaining a bearish near-term tone below the 200-period SMA on the 4-hour chart, with the MACD indicator in positive territory and the RSI around 43, indicating a potential pause in the downside rather than a clear bullish reversal [1].
CONCLUSION
Gold remains under pressure due to a strong US Dollar, persistent inflation concerns, and heightened geopolitical risks, with traders awaiting key US employment data for further direction. While the technical outlook is bearish, the absence of aggressive selling suggests caution among market participants. The upcoming NFP report and Fed policy cues are likely to determine the next significant move for XAU/USD.