Gold prices (XAU/USD) extend their mild pullback for a second consecutive session, slipping back toward the previous overnight low during Thursday’s Asian trade. The decline appears largely driven by profit-taking rather than a fresh fundamental trigger, and downside momentum remains contained by a broadly supportive macro backdrop. While global risk sentiment has been resilient, rising geopolitical tensions are beginning to resurface, which could revive demand for the safe-haven metal. In addition, expectations that the Federal Reserve will turn more dovish should help cushion losses in the non-yielding yellow metal.
Mixed US macroeconomic data released on Wednesday did little to challenge market pricing for two Fed rate cuts later this year. As a result, the US Dollar has struggled to build on its recent gains, offering some underlying support to Gold. That said, traders appear reluctant to commit to fresh directional bets ahead of Friday’s highly anticipated US Nonfarm Payrolls (NFP) report, which could provide clearer guidance on the Fed’s policy path. This backdrop argues for caution before positioning aggressively on the bearish side.
Daily Digest – Market Movers
Recent profit-taking in Gold follows fading market reaction to geopolitical headlines earlier in the week. However, a combination of persistent global risks is likely to limit deeper losses. Heightened tensions involving US foreign policy, uncertainty surrounding the Russia–Ukraine conflict, unrest in the Middle East, and ongoing concerns in Iran continue to underpin safe-haven demand.
At the same time, expectations that the Fed could lower borrowing costs as early as March, followed by another cut later in the year, remain intact. These factors together help keep Gold supported despite near-term selling pressure.
On the data front, the Institute for Supply Management (ISM) reported a stronger-than-expected rebound in US services activity in December. This upbeat signal, however, was offset by softer labor market indicators. ADP data showed modest private-sector job growth, while JOLTS figures pointed to a further decline in job openings—reinforcing uncertainty around the strength of the US labor market.
With attention firmly on Friday’s NFP release, traders are likely to stay on the sidelines. The employment data will play a key role in shaping expectations for Fed policy, influencing USD demand and the next meaningful move in Gold. In the interim, weekly US Initial Jobless Claims due later Thursday may generate short-term volatility, though stronger confirmation would be needed to justify sustained downside positioning.
Technical Outlook
From a technical standpoint, the $4,425 area—where the 100-hour Simple Moving Average aligns with the 38.2% Fibonacci retracement of the recent upswing—acts as a key near-term support. A decisive break below this zone could accelerate losses toward the $4,400 level. Momentum indicators lean bearish, with the MACD below its signal line and the RSI hovering near 40, indicating limited upside traction.
On the upside, any recovery attempt is likely to face resistance near the 23.6% Fibonacci retracement around $4,450. Failure to reclaim this level would keep rallies capped, while a sustained move back above key retracement zones would be needed to stabilize the broader tone.
