Gold prices have risen since yesterday. The surge aligns with growing speculation about US interest rate cuts and renewed fiscal concerns over the US government’s ‘Big Beautiful Bill’.

The latest Senate version might increase US debt beyond original estimates. Upcoming US data, particularly the labour market report on Friday, is crucial for determining whether interest rate expectations will shift.

Labour Market Impact

If the labour market remains strong, it may challenge expectations for interest rate cuts and impact gold prices.

This article does not offer investment advice, and readers are advised to conduct personal research before making decisions.

We’ve seen gold tick upward following expectations that the US Federal Reserve might take a softer stance in the months ahead. The move also comes as Washington’s fiscal posture grabs renewed attention. Legislators are now navigating the updated version of what’s being called the “Big Beautiful Bill”, which has the potential to push American debt further than was forecast earlier this year. This fiscal uncertainty has added a layer of concern that appears to be rippling through precious metals.

From our side, we should consider how the upcoming US labour data figures into this. Friday’s non-farm payrolls will likely be one of the more direct inputs into market sentiment. If those readings come in hot—with unexpected job creation or stronger-than-forecast wage growth—then expectations for rate cuts may get pared back rather quickly. And gold, which has been feeding off those rate cut bets, could stall out or reverse.

However, a weaker labour print would firm up the existing expectations and could even amplify the momentum we’ve seen over the past few sessions. The link is here: softer economic data acts as a green light for the Fed to consider loosening policy, which, in turn, tends to push bond yields lower and raise the appeal of gold.

Traders And Risk Management

Traders holding open derivative exposures, especially in short-term gold options and futures, should measure not just direction but also the volatility embedded in the next few sessions. Positioning ahead of high-impact data always carries added risk. Implied vols in shorter-dated instruments ahead of NFP may provide useful signals as participants set up hedges or directional plays.

Debt dynamics may also feed into broader USD strength—or weakness. If confidence in government spending begins to erode further, this could pressure the dollar and offer further support to both gold and other store-of-value plays. Conversely, any political concessions or adjustments to the bill that reduce projected deficits might take pressure off yields, which could weigh against gold’s recent buying.

We’re watching not just the outright price action in gold, but also the relative move compared to real yields and the dollar. Any divergence there can also give early reflections of how participants are recalibrating their views post-labour data. Traders may seek to avoid overcommitting ahead of clarity, especially in leveraged strategies. Timing and duration of entries will matter.

Create your live VT Markets account and start trading now.