• Gold tumbles after failing to break $2,531 resistance, closing at $2,493 as Fed rate cut speculation intensifies.
• US Nonfarm Payrolls missed estimates, but improved figures and rising hourly earnings fueled uncertainty over a 25 or 50 bps cut.
• Despite falling Treasury yields, the US Dollar Index recovered above 101.00, pressuring Gold prices further.

Gold retreated after failing to test the all-time high of $2,531 and diving more than 0.80% late in the North American session. US economic data cast doubts on a 50 or 25-basis-point (bps) interest rate cut by the Federal Reserve (Fed) at the September meeting. The XAU/USD trades at $2,493 after hitting a high of $2,529.

The US Bureau of Labor Statistics (BLS) revealed that Nonfarm Payrolls (NFP) in August missed their estimate but improved compared to July’s downwardly revised number. Digging deep into the report, the Unemployment Rate dipped compared to the previous month, while Average Hourly Earnings rose.

According to the data, Fed interest rate probabilities fluctuated sharply. Based on CME FedWatch Tool data, at some point, traders priced a 50 bps cut with odds rising as high as 70%. Nevertheless, as the dust settled, market participants estimated that a 25 bps cut was more likely as the chances of it rose by 73%, while for a 50 bps cut they decreased to 27%.

In the meantime, Fed policymakers crossed the newswire. New York Fed President John Williams said that lowering rates soon will help to keep the labor market balanced. Fed Governor Christopher Waller echoed some of his comments at a speech at the University of Notre Dame. He said, “The time has come” to begin easing policy and revealed that he was open to any size of easing.