Gold price (XAU/USD) experienced selling pressure, falling to near $4,675 during the early Asian session on Friday, ahead of the release of the US Nonfarm Payrolls (NFP) report for March [1]. The decline was attributed to US President Donald Trump's remarks regarding the war with Iran, which spiked crude oil prices and reduced expectations for interest rate cuts [1]. Trump stated in a televised speech that his core 'objectives are nearing completion' in Iran, but warned that the US would hit Iran 'extremely hard' for the next two to three weeks [1].
The rise in oil prices and diminished rate cut expectations have made gold less attractive, as it does not yield interest and is typically favored during periods of geopolitical uncertainty [1]. Trading activity remained muted due to Good Friday [1]. Market participants are awaiting the US March jobs data, with expectations for the NFP to show 60,000 jobs added and the unemployment rate to remain steady at 4.4% [1]. A weaker-than-expected jobs report could undermine the US Dollar and provide support for gold prices, which are denominated in USD [1].
Gold is widely regarded as a safe-haven asset and a hedge against inflation and depreciating currencies, with central banks being the largest holders. In 2022, central banks added 1,136 tonnes of gold worth around $70 billion to their reserves, the highest yearly purchase since records began, according to the World Gold Council [1]. Gold typically has an inverse correlation with the US Dollar and US Treasuries, and its price is influenced by geopolitical instability, recession fears, and movements in risk assets [1].
CONCLUSION
Gold prices have fallen below $4,700 amid heightened geopolitical tensions and rising oil prices following President Trump's comments on Iran. The market is awaiting US jobs data, which could influence gold's direction depending on the outcome. Overall, sentiment is cautious, with medium market impact expected as traders monitor both geopolitical developments and economic indicators.