What's Driving Gold's Rally? Delayed NFP Data and Fed Rate Cut Uncertainty Shape XAU/USD Outlook

Economic Uncertainty Lifts Safe-Haven Appeal

The delayed September Nonfarm Payrolls (NFP) report—postponed due to a 43-day government shutdown—has injected heightened uncertainty into markets and bolstered demand for defensive assets. Weak labor market data could signal economic slowdown, prompting investors to seek refuge in non-yielding assets like Gold. With the employment picture unclear, market participants are increasingly cautious about the Federal Reserve’s next move.

Fed Officials Split on Rate Path

Recent minutes from the Federal Open Market Committee’s (FOMC) October 28-29 gathering reveal considerable disagreement among policymakers regarding future monetary policy. Although the committee approved a 25 basis point rate cut, the decision was contentious—several officials opposed further reductions in December. This division has cooled market enthusiasm for aggressive easing, with rate cut odds for next month now hovering around 30%, down sharply from 60% a week earlier, per CME FedWatch data.

The Gold Price Forecast Hinges on Labor Data

Gold (XAU/USD) has climbed toward $4,110 in Thursday’s Asian trading, as investors rotate into the precious metal amid macro uncertainty. The forthcoming September jobs report will be crucial: a disappointing employment figure could revive December rate cut bets and propel the yellow metal higher by lowering real interest rates. Conversely, if data proves resilient, fading expectations of near-term Fed easing could weigh on non-yielding Gold, creating headwinds for buyers.

Rate Cuts and Precious Metals: The Connection

Lower interest rates reduce the opportunity cost of holding Gold, making the asset more attractive to savers and investors seeking yield alternatives. Conversely, sticky inflation and sustained rate hold expectations could pressure XAU/USD. Markets will dissect every detail of the delayed employment report, as it may offer the most concrete evidence of labor market health since the government shutdown disrupted economic data releases.