Gold falls further from its all time high following hawkish remarks by Fed members.
The gold price (XAUUSD) Extended the previous day’s small fall from the record high. Losing territory throughout the Asian session on Friday. The overnight hawkish remarks by Federal Reserve (Fed) officials helped the US Dollar (USD) get some follow through positive traction and move away from a nearly two week low. Which is expected to drive the commodity lower for the second consecutive day.
Persistent geopolitical tensions should restrict the downside risk to the safe-haven XAUUSD.
However, the downturn for the precious metal appears to be mitigated. In Geopolitical concerns resulting from crises in the Middle East tend to boost traditional safe-haven assets.
Traders may also avoid from taking aggressive wagers ahead of the critical US employment data.
Traders may also choose to wait for additional clues regarding the Fed’s interest rate cutting course before placing new directional bets on the non-yielding Gold price. As a result, the attention will remain on the release of the critical US monthly employment data, known as the Nonfarm Payrolls (NFP) report. Which is scheduled for later in the North American session. Any disappointment will add to evidence of a softening labor market. And reinforce the case for a June Fed rate cut. Such a development could spark a new round of USD selling, providing extra support to the yellow metal.
Daily Market Movers: Gold price shows some follow-through profit-taking amid mixed rate reduction cues.
Federal Reserve officials were cautious in their statements about the possibility of interest rate decreases this year. Prompting some profit taking in the gold market.
Richmond Fed President Thomas Barkin stated that he is willing to lower interest rates if it is obvious that inflation improvement will be sustained and applied more broadly in the economy.
At the March meeting. Minneapolis Fed President Neel Kashkari indicated he had penciled in two rate cuts this year. Though none may be required if inflation continues to drift sideways.
The hawkish comments maintain the US Treasury bond yields elevated. Which helps the US Dollar build on the overnight rebound and further exerts pressure on the non-yielding yellow. metal.
Moreover Geopolitical tensions in the Middle East have risen amid continuing suspicions. That Iran may retaliate for Israel’s attack on its embassy in Syria earlier this week.
Fyrthermore This, combined with the extended Russia-Ukraine conflict and a tragic earthquake in Taiwan, continues to weigh on market mood and should boost the safe-haven XAUUSD.
Traders are now looking forward to the US monthly jobs report.
Investors are now looking forward to the US monthly jobs report. Which is expected to indicate that the economy added 200K jobs in March, up from 275K the previous month. And that the unemployment rate remained stable at 3.9%.
Aside from that, average hourly earnings will affect market expectations regarding the Fed’s rate-cut path. Which, in turn, will drive the USD and provide a fresh impetus to the commodities.
