Will the delayed September NFP and gold price trend change signals after the US federal government shutdown?

Current Market Sentiment for Gold Prices: Defending $4,100

In early Thursday Asian trading, spot gold(XAU/USD) fluctuated around $4,110 per ounce. Due to the 43-day-long U.S. federal government shutdown, the September Non-Farm Payrolls (NFP) report(NFP) was delayed, and the current gold price is showing a cautious trend not just as a technical correction but as a “wait-and-see” approach until the data is released.

What does the level of $4,100 per ounce signify? It serves as a psychological benchmark beyond just a price level. While demand for gold as a safe-haven asset still exists, there is no strong confidence to initiate a new rally. This is a typical pre-event waiting pattern that the current gold market is displaying.

The Significance of the Delayed NFP: Filling the Gap with the First Data

Unlike regular monthly economic indicators, this September NFP holds a special position. Due to the federal shutdown halting key economic data releases for a month, both the Federal Reserve and bond, forex, and commodity markets have been making decisions without a clear picture of the labor market’s actual state.

This NFP is more than just showing last month’s hiring trend; it is akin to the “first confirmation signal” for market judgment after a long gap. How the Fed interprets and reacts to this data is likely to significantly influence the future dollar strength and the direction of gold prices.

What the Market is Betting On: Not the Data, but the Fed’s Attitude Shift

At the FOMC meeting held on October 28–29, the Fed cut rates by 25 basis points. However, the minutes reveal a clear cautious stance among members regarding further cuts. This change in attitude is also reflected in market futures prices.

According to CME FedWatch, just a week ago, the market priced in about a 60% chance of an additional rate cut in December. Now, that probability has dropped to around 30%. Such a rapid shift in sentiment occurred despite the same economic conditions and the same Fed.

This directly impacts gold prices. If the likelihood of further rate cuts diminishes, the dollar is more likely to strengthen, which can exert downward pressure on gold prices denominated in dollars.

Two Scenarios After NFP

Weak Employment Data Scenario: If the data comes in weaker than expected, the market may interpret it as “the Fed might cut rates sooner than anticipated.” This could renew expectations for a December cut, providing a reason for gold to test above $4,100 again.

Solid Employment Data Scenario: If the employment figures meet or exceed expectations, the Fed’s cautious stance is likely to be reaffirmed. In this case, the existing hedge positions may unwind, and gold prices are expected to fluctuate around $4,100 per ounce, digesting the volatility.

Conclusion: The Direction of Gold Prices Is Still Uncertain

Currently, the gold market around $4,100 per ounce is not showing a clear bias toward a specific direction. Instead, it is more about maintaining hedge positions until the Fed’s next signal.

Whether the delayed September NFP indicates a “strong economic signal” or is just a “passing statistical blip” will determine the nature of this pause. Investors should pay attention not only to the gold price itself but also to the Fed’s attitude and the dollar market’s reaction following the NFP release. These will be the key factors shaping the future trend of gold prices.