Gold slips below $4,100 as strong jobs data fuels Fed rate-hike expectations

Gold retreated from a recent peak of $4,106, slipping to about $4,060 on Friday as the October non-farm payroll report far exceeded expectations and lifted market expectations for a Federal Reserve rate hike at its December meeting. The stronger-than-expected jobs data, which showed payrolls rising by 165,000 and the unemployment rate easing to 4.1%, also pushed the U.S. dollar index above the 102.00 level.

Investors responded by buying the dip in U.S. equities, while the CME FedWatch Tool indicated that the probability of a December hike rose from 67% to 77% after the report. St. Louis Fed President Alberto Musalem said, ">people remain concerned about inflation at the current level," noting that inflation expectations stay anchored and that recent excess inflation stems from energy shocks and AI-related spending.

Despite the bullish tilt in the dollar, U.S. Treasury yields eased, with the 10-year note yielding 4.84%, up 0.1% on the day. Technical analysis shows gold struggling below the $4,100 mark, with momentum turning bearish as the Relative Strength Index moved toward neutral. The metal is expected to trade within a $4,050-$4,150 range this week, while a break below $4,000 could open the path to further declines toward $3,919 and $3,879 support levels. Market participants will watch next week’s U.S. inflation data, jobless claims and additional Fed commentary for further direction.