Gold Gains as Traders Brace for Consumer Sentiment Data

Safe Haven Demand Lifts Gold as Risk Appetite Fades
Gold prices held firm near a critical resistance level as traders sought refuge from declining risk sentiment. Concerns over stretched valuations in the technology sector, especially among AI-related stocks, have kept investors cautious. The precious metal also drew support from softer Treasury yields and rising bets that the Fed could resume rate cuts as early as next month.

Labor Market Weakness Rekindles Rate-Cut Speculation
Fresh labor market data added to the cautious tone. A report from Challenger, Gray & Christmas showed corporate layoffs surged 183% in October  the steepest rise in more than two decades. The weak data pushed US Treasury yields lower and raised the implied probability of a December rate cut to nearly 70%, up from 62% earlier in the week. Traders are now reassessing the Fed’s ability to maintain a “wait-and-see” stance amid signs of slowing economic momentum.

Dollar Struggles to Regain Footing
While the US dollar attempted a minor rebound, its momentum remains constrained by falling yields and growing expectations of policy easing. The greenback’s pause has helped gold stabilize above the $3,975 mark, reinforcing its appeal as a defensive asset.

Forex Market Outlook: Traders Await Sentiment Data for Direction
In the FX space, volatility is likely to remain muted until the release of the UoM sentiment report. A stronger than expected reading could offer temporary support to the dollar, but sustained risk aversion and lower yields may continue to favor safe haven currencies such as the yen and Swiss franc. As the week draws to a close, traders should expect position adjustments and end of week flows to dictate short term market moves.