• Gold rises above $2,500, peaking at $2,523 before profit-taking ahead of key US economic data.
• Traders price in over 104 bps of Fed easing, expecting rate cuts to maintain labor market stability.
• Falling US Treasury yields and a weaker US Dollar support further upside in Gold prices.

Gold prices rallied sharply during the North American session, above the $2,500 figure on Thursday, yet remain shy of their daily peak of $2,523 as traders booked profits ahead of first-tier United States (US) data. At the time of writing, XAU/USD trades at $2,516, gaining over 0.80%.

In the early morning, US jobs data showed mixed readings, though it confirmed that the labor market is cooling, fueling speculation for a 50-basis-point (bps) interest rate cut by the Federal Reserve (Fed) in two weeks. On the other hand, the economy remains resilient as business activity in the services segment improved against projections of a slowdown.

However, Gold traders lifted the yellow metal above $2,500, as they priced in over 104 bps of Fed easing, according to the December 2024 Chicago Board of Trade (CBOT) fed funds futures contract.

What is almost certain is that the Fed may lower borrowing costs, according to San Francisco Fed President Mary Daly. She commented that the Fed needs to cut rates to keep the labor market healthy.

US Treasury yields fell after the data with the 10-year Treasury note down three basis points to 3.727%, undermining the buck. The US Dollar Index (DXY), a measure of the Greenback’s value against the other six currencies, tumbles over 0.21% to 101.05.

In the meantime, Gold traders are preparing for the release of the August Nonfarm Payrolls (NFP) report.