Gold price hovers around 1,990 ahead of NFP report
(XAU) gained 0.17% on Thursday due to weakening and falling Treasury yields as anticipations grow that the US Federal Reserve (Fed) may have concluded its rate hikes. interest rates.
The Federal Reserve on Wednesday kept its interest rate unchanged but suggested a further increase could be possible due to enduring high inflation and a strong labor market. However, the consensus in financial markets leans toward not raising rates further, anticipating that the delayed effects of previous increases will manifest in the economy. At the same time, gold has pulled back from its recent highs, setting up for a weekly drop of about 1%, as tensions in the Middle East have also begun to ease.
“Gold is supported because there are signs of cracks in the US labor market, which likely indicates that the Federal Reserve is completely pulling back on rate hikes,” said Bob Haberkorn, senior market strategist at RJO Futures.
In fact, yesterday’s jobless claims data showed a weekly increase of 217,000, which was higher than the market expected and was also the largest increase in almost two months.
XAU/USD remained essentially stable during the Asian and European sessions. Market participants are now focusing on the upcoming monthly US Nonfarm Payrolls (NFP) report due at 12:30 pm UTC to assess the strength of the labor market and inform their expectations for future labor market movements. Interest rates. Lower than expected figures will positively affect XAU/USD, which could take the price to $2,000. However, XAU/USD may correct lower if the numbers turn out to be higher than expected.
Euro continues to rise amid mixed messages from officials
(EUR) gained as much as 0.49% on Thursday as the (DXY) fell due to lower US labor costs and a slight increase in jobless claims.
Comments from ECB officials have been somewhat contradictory. Klaas Knot acknowledged that interest rates had reached an appropriate “cruising height”, while ECB chief economist Philip Lane signaled a strong possibility of a soft landing. However, Isabel Schnabel recently stated that while the ECB is on track to push inflation back to its 2% target by 2025, it cannot yet close the door on further interest rate hikes. This comes as October’s eurozone manufacturing PMI indicated a recession-level figure of 43.1 and German unemployment rose beyond expectations.
EUR/USD rose slightly during the Asian and European sessions. Today, the main focus will be on the Nonfarm Payrolls (NFP) report. If it reveals that the labor market in the US is slowing down and the NFP figures come out lower than expected, EUR/USD could rise above 1.06600.