If the report shows strong job growth and subdued unemployment, it could reduce the probability of a December rate cut. Such an outcome would strengthen the dollar and likely weigh on gold prices by raising the opportunity cost of holding non-yielding assets. Conversely, weaker-than-expected job numbers could bolster rate cut expectations, softening the dollar and supporting gold prices.

Is Inflation Stalling the Fed’s Next Move?

Core PCE inflation data, released last week, showed persistent inflationary pressures, complicating the Federal Reserve’s ability to move aggressively toward rate cuts. Nonetheless, expectations for easing remain, with market pricing showing a 66% likelihood of a 25-basis-point reduction in December​​.

The dollar’s performance will remain a critical factor. After declining midweek, the greenback ended November higher, buoyed by the prospect of prolonged elevated interest rates. If Friday’s jobs data fuels expectations of tighter Fed policy, further dollar strength could cap any potential gains for gold.

Can Geopolitical Risks Keep Gold Afloat?

While safe-haven demand was subdued earlier in the week due to optimism over ceasefire talks in the Middle East, persistent risks, such as the ongoing Russia-Ukraine conflict, offer a floor for gold prices. Heightened geopolitical tension could reignite demand for bullion, especially if market sentiment turns risk-averse​.

Where Are Gold Prices Headed Next Week?