In light of Friday’s Asian trading session, GOLD prices experienced a modest ascent, reaching a peak around the $1,944 mark. However, the momentum was
In light of Friday’s Asian trading session, GOLD prices experienced a modest ascent, reaching a peak around the $1,944 mark. However, the momentum was short-lived as the precious metal slipped to its day’s low shortly after, currently hovering just shy of the $1,940 threshold.
The largely neutral performance today comes as investors remain on the sidelines, awaiting pivotal employment data from the US, which could shape their subsequent market strategies.
The much-anticipated Non-Farm Payrolls (NFP) report, set to be unveiled during the early North American session, will offer insights that could sway expectations surrounding the Federal Reserve’s impending policy decisions. These revelations will undeniably impact the trajectory of the US Dollar (USD) and, by extension, infuse momentum into GOLD pricing. Presently, ambiguity regarding the Federal Reserve’s rate-hike trajectory impedes the USD’s attempt to build upon its overnight recovery from a fortnight’s low, inadvertently providing support for the dollar-pegged precious metal.
To contextualize, recent US macroeconomic data, including the ADP employment report and the second estimate of the US Q2 GDP, hint at a possible deceleration in the otherwise robust US economy. Such indicators have ignited discussions about a potential pivot from the Fed’s hawkish stance in the near term. Nonetheless, Thursday’s release of the US Personal Consumption Expenditures (PCE) Price Index suggests the possibility of an additional 25 basis points rate increase in 2023, which subsequently incited a short-lived USD revival from the 200-day Simple Moving Average (SMA).
Complementing this, the prevalent sentiment that the Federal Reserve will sustain elevated interest rates has provided a buffer to US Treasury bond yields, arresting their retreat from recent highs. Paired with a generally optimistic sentiment surrounding US equity futures, these factors serve to limit the upward potential of GOLD , which traditionally doesn’t yield returns. Consequently, it’s advisable for investors to anticipate definitive buying signals before considering a continuation of gold’s recent rally from its March low around the $1,885 mark.
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