Gold price attracted some sellers below the $2,400 threshold.
During Monday’s early European session, the gold price (XAUUSD) attracted some sellers. According to official data issued on Sunday, the People’s Bank of China (PBoC), the Chinese central bank, held off on gold purchases for the second month in June. It’s worth mentioning that China is the world’s largest bullion buyer, and the delay in gold buying may weigh on The gold price.
The assumption that the Fed would lower rates in September may limit the XAUUSD’s fall.
On the other side, increased speculation that the US Federal Reserve (Fed) may decrease interest rates in the third quarter may drive up the non-yielding gold price. Furthermore, political instability in France following exit polls indicating a hung parliament might enhance safe-haven assets such as XAU. Traders will take more clues from Fed Chair Jerome Powell’s testimony on Tuesday, which comes ahead of the US June Consumer Price Index (CPI) inflation data on Thursday.
Daily Market Movers: Gold price falls as PBoC refrains from gold buying for the second month.
The US Nonfarm Payrolls (NFP) increased by 206K in June, following the 218K rise (revised from 272K) recorded in May. This amount exceeded the market expectation of 190,000.
The unemployment rate increased to 4.1% in June from 4% in May. Average hourly earnings, or pay inflation, fell to 3.9% YoY in June from 4.1% in May, in line with market expectations.
The fresh employment numbers have increased the chances of a Fed rate cut in September, with markets pricing 77% probabilities, up from 70% prior to the announcement.
According to The Economist, polls show that the left-wing New Popular Front (NFP), led by Jean-Luc Mélenchon, is on pace to win the most seats in the second round of French parliamentary elections on Sunday.
“It looks that gold prices are still a touch too high, “The PBoC is waiting for a further pullback before restarting its XAU purchasing program,” said Nitesh Shah, a commodity strategist at WisdomTree.
