Gold (XAU) Price Forecast: Will the Gold Rally Resume After Key US Jobs Data?

Gold Prices Decline as Traders Take Profits, US Jobs Data in Focus

Gold prices retreated by about 1% on Thursday as traders locked in gains following a three-day rally. Investors are now closely monitoring upcoming US jobs data for signals on the Federal Reserve’s rate policy while also weighing the impact of escalating global trade tensions.

Gold Prices Pull Back Ahead of Jobs Report

After climbing for three consecutive sessions, gold faced selling pressure as traders took profits, with prices hovering around $2,900 ahead of Friday’s key non-farm payrolls (NFP) report. The report is expected to show an increase of 160,000 jobs for February, according to economists polled by Reuters. A stronger-than-expected print could reinforce the Fed’s cautious stance on rate cuts, pressuring gold prices further.

At the same time, heightened trade tensions remain a key factor for gold. The US imposed fresh 25% tariffs on imports from Mexico and Canada earlier in the week, along with additional duties on Chinese goods. However, some optimism emerged after President Donald Trump announced a one-month exemption on auto tariffs for certain manufacturers. This development lifted Asian equities, suggesting that markets are still weighing the potential for easing trade tensions.

Treasury Yields Climb on Tariff Relief Optimism

US Treasury yields edged higher on Thursday as markets responded to the temporary auto tariff exemption. The White House clarified that reciprocal tariffs on USMCA-aligned automakers would be postponed by one month, providing relief for some firms. This decision followed a mixed batch of US economic data, which had initially driven Treasury yields lower.

The 2-year Treasury yield dropped to 3.89% after a weaker-than-expected ADP private payrolls report, raising concerns about potential softness in the broader labor market. However, yields rebounded after the ISM services index painted a stronger economic picture, signaling resilience in the US economy.

Gold Prices Forecast: Further Downside Likely if Data Supports Stronger Dollar

Gold’s near-term outlook remains tied to Friday’s NFP report. A solid jobs print could strengthen the US dollar and push Treasury yields higher, increasing the opportunity cost of holding non-yielding gold. In that scenario, gold could see additional downside pressure.

However, ongoing trade uncertainties and geopolitical risks could keep safe-haven demand intact. If the jobs data disappoints, expectations for a Fed rate cut may grow, providing support for gold prices. For now, without a clear bullish catalyst, the market appears vulnerable to further declines.

More Information in our Economic Calendar.