Ouro retreats under dollar pressure before the US standard date

Geopolitical tensions and dovish Fed expectations hinder metal’s decline this Friday

Gold remains under pressure this Friday, continuing the downward momentum accumulated since the start of the Asian session. The precious metal failed to sustain Thursday’s gains above US$ 4,400 and attracts renewed selling as the US dollar remains strong at its highest levels in recent weeks. The greenback reached a nearly one-month high, directly weighing on the most sought-after commodity by investors.

Despite the USD’s upward movement, the strengthening has not been unlimited. Expectations of rate cuts by the Federal Reserve continue to restrain further gains of the US currency ahead of crucial data this Friday. Markets are pricing in a significant probability of a rate cut in March, followed by additional easing later this year. This dovish dynamic provides some protection to gold, preventing a more pronounced decline.

Full focus on the US employment data

The US non-farm employment report will be the main driver of prices today. The market expects the creation of 60,000 jobs in December, below the 64,000 recorded in November. At the same time, the unemployment rate is expected to decrease from 4.6% to 4.5%, signaling a resilient labor market.

This data will be crucial in defining the Fed’s rate cut trajectory in the coming quarters. A surprising result could trigger volatility in both the dollar and gold. Traders are closely watching this afternoon’s statement to realign their positions before the weekend.

US Treasury Secretary Scott Bessent reinforced this week that lowering interest rates is the missing catalyst to amplify economic growth. This narrative favors continued bets on monetary easing, supporting yellow metal at lows.

Geopolitical risks provide a floor for the XAU/USD pair

While rate dynamics determine short-term movements, geopolitical uncertainties gain ground as a supporting factor. Tensions between Russia and Ukraine remain high, with German Chancellor signaling that a peace agreement is still distant. Chancellor Friedrich Merz warned about the danger of sending European troops to the region.

Separately, the dispute between China and Japan has intensified. Beijing restricted exports of rare earths and magnets to Tokyo in response to Japanese Prime Minister’s statements about Taiwan. Additionally, President Donald Trump signaled US intentions to manage Venezuela and explore its massive oil reserves.

These risks sustain gold as a safe haven asset, limiting further losses before the employment data is released.

Technical: Optimistic structure, but caution before US$ 4,500

The XAU/USD pair remains trading above the 200-period exponential moving average, around US$ 4,322.58, maintaining the medium-term upward slope. The MACD line remains below zero, although showing signs of improvement, with the negative histogram contracting.

The RSI index at 56 indicates improving momentum without signaling overbought conditions. If the momentum consolidates, buyers may extend the advance, with supports softened by the prevailing trend.

Staying above US$ 4,322.58 preserves the bullish bias. A decisive break below this level would open space for a deeper retracement. Optimists should wait for acceptance above US$ 4,500 before reinforcing long positions on a more solid basis.

US dollar performance in context

This week, the USD showed strength against most developed currencies, gaining 0.92% against the Swiss franc. Against the euro, the appreciation was more modest at 0.60%. The Japanese yen declined 0.27% relative to the US dollar, while the Canadian dollar fell 0.90%.

The dollar’s strength reflects expectations of higher rates for a longer period, pressuring non-yielding commodities like gold. However, dovish narratives limit any excessive rally before today’s US standard data.