US Treasury yields dropping

Consequently, investors are fearful of recession and are pricing in Federal Reserve rate cuts later in the year and the Gold price is finding support from a fall in US Treasury yields. The US two-year note was paying as little as 3.646% on the day while the yield on the 10-year note was down to a low of 3.268%. Both notes were poised to close at lows last seen in September as safe-haven buying pushed bond prices, which move opposite to their yields, higher.

Reuters reported that ´´futures priced in a 39.1% likelihood that the Fed raises its target rate by 25 basis points on May 3 when policymakers conclude a two-day meeting, down from 59.7% on Monday, CME's FedWatch Tool showed. Chances the Fed cuts rates by year's end also rose, with the outlook for the US central bank's target rate falling below 4.0% in December.´´

US Nonfarm Payrolls could see outsize movements

Looking ahead, the market now is waiting for the US Nonfarm Payrolls report on Friday and Gold price bulls will be keen to see if there will be any confirmation that the labor market is cooling, a major requisite in the Federal Reserve's fight to curb inflation. Particular attention will be paid to the Unemployment Rate in this regard. 

Analysts at Brown Brothers Harriman said the following with regard to the forthcoming jobs data:

´´The consensus for Nonfarm Payrolls this Friday stands at 240k vs. 311k in February, while the unemployment rate is seen steady at 3.6%.  Average hourly earnings are expected to slow to 4.3% y/y vs. 4.6% in February.  It's worth noting that the data will come on Good Friday.  With markets likely to be very thin, we could get some outsize movements from the numbers, whether good or bad. ´´