• Gold price struggles to capitalize on the previous day’s strong rise of nearly 2%. 
• The upbeat US labor market report underpins the USD and acts as a headwind.
• The risk-on impulse further caps gains, though Fed rate cut bets offer support. 

Gold price (XAU/USD) rallied nearly 2% on Thursday and snapped a four-day losing streak in the wake of rising bets for bigger interest rate cuts by the Federal Reserve (Fed) in September. Apart from this, fears of a wider Middle East conflict turned out to be another factor that drove flows towards the safe-haven precious metal. The strong intraday positive move, meanwhile, seems rather unaffected by some follow-through US Dollar (USD) buying, which tends to undermine demand for the commodity.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, shot to a fresh weekly high in reaction to the upbeat data, showing that unemployment benefits fell more than expected last week. The solid labor market report eased fears of an imminent recession, which pushed the US Treasury bond yields higher and offered some support to the buck. Adding to this, the risk-on impulse contributes to keeping a lid on the safe-haven Gold price during the Asian session on Friday.