Gold price attracted some buyers, snapping a nine-day losing skid to a multi-month low.
The gold price (XAUUSD) rises during the Asian session on Friday. Breaking a nine-day losing run around the $1,813 level, or a new seven-month low reached the previous day. Any major upward movement. However, appears tricky, as traders may choose to remain on the sidelines. Ahead of the release of the important monthly data. Employment information from the United States (US) is expected later on Friday.
The rise lacks a clear cause and is likely to be limited in the face of hawkish Fed forecasts.
The widely publicized Nonfarm Payrolls (NFP) data will shape expectations about the Federal Reserve’s (Fed). Future rate-hike course and offer new directional impetus to the Gold price. Meanwhile, the possibility of more Fed policy tightening remains supportive of rising US bond rates. Which allows the US Dollar (USD) to halt a two-day corrective decline from the YTD top and should limit precious metal gains.
Market players are optimistic that the Fed would maintain its hawkish posture in the face of persistent US macrodata. Which remain consistent with predictions for solid third-quarter growth. Furthermore, improved US employment figures would put greater pressure onwages and inflation. Forcing the Fed to maintain rates higher for longer. This, in turn, should strengthen the USD and impact on the price of gold priced in US dollars.
Daily Market Movers: Gold prices rise after falling for nine straight sessions.
The gold price gets some traction on Friday, moving away from a seven-month low reached the previous day. Amid some repositioning trading ahead of the critical US NFP news.
The US economy is forecast to add 170K jobs in September, down from 187K the previous month. While the unemployment rate is expected to fall to 3.7% from 3.8% in August.
The benchmark 10-year US Treasury bond yield is around a 16-year high. of aggressive Fed forecasts and supports the US Dollar, limiting potential for XAUUSD.
Fed officials expressed little alarm about the recent spike in US bond rates, saying that it might potentially help the central bank combat stubbornly high inflation.
Moreover Fed officials have warned that rates are likely to remain high, despite markets are putting in just a 40% possibility of another rate rise before the end of the year.
Traders are now anticipating the release of the critical US NFP report for new directional momentum.
According to Thursday’s US macro data, Weekly Jobless Claims increased modestly to 207K last week, remaining near recent lows and indicating still-tight labor market conditions.
Furthermore The prolonged tightness in the labor market may put upward pressure on inflation and need more monetary stimulus. Rate hike by US central Bank.
