Gold prices rose to session highs on the back of lower-than-expected US non-farm payrolls data. So what to expect for this week?
Non-farm employment figures and gold prices
Gold prices fell short of expectations. It rose on the relatively benign Non-Farm Payrolls data. Looking at the data, the unemployment rate came in 0.1% lower. This supported the gold price somewhat. Gold rose from $1,920 to $1,928.40 an ounce. Meanwhile, 15 minutes after the data, there was a decrease in Gold prices. The price declined below $1,920.
Data released Friday by the U.S. Bureau of Labor Statistics revealed a different situation. Accordingly, non-farm employment in the US increased by 209,000 in June. This figure came in below the market expectation of 225,000. The increase of 339,000 in May was revised to 306,000. Unemployment Rate decreased from 3.7% to 3.6% as expected. Annual wage inflation, measured by Average Hourly Earnings, remained unchanged at 4.4% compared to analysts’ forecast of 4.2%. Finally, the Labor Force Participation Rate remained stable at 62.6%, while the Unemployment Rate fell 0.1% from 6.7% to 6.9%.
All in all, data continues to support a strong labor market. Also, May JOLTS job postings came in at 9.824 million, compared to the anticipated 9.9 million and the revised 10.32 million (from 10.1 million) in April. In addition, ongoing unemployment claims came in at 1.72 million compared to 1.737 million expected. This figure is the lowest since mid-February.
Gold prices technical analysis
Looking at the technical analysis for gold prices, the price is at the forefront of the downtrend. Also, the data has done little to change the downtrend so far. The bears are looking for a break of $1,893 protecting a run up to $1,824.25. Gold prices were flat on Monday as investors traded cautiously ahead of expected US inflation data this weekend to gauge the impact of rate hikes and whether further policy tightening is on the cards.
Spot gold was little changed at $1,923.69 an ounce. U.S. gold futures were down 0.2% at $1,929.10. “Gold bullion’s spike on Friday has subsided rapidly as this latest US jobs report will not allow the Fed to stop rate hikes just yet,” says Han Tan, Exinity Chief Market Analyst. Tan also emphasizes:
“If the core US CPI data due Wednesday reveals the still stubborn inflationary pressure, it could push the gold bullion bears to push the precious metal below $1,900 if markets raise bets on a further Fed rate hike after July.”
Sensitive price emphasis
Gold prices are moving as investors lower their expectations that the Fed’s rate hike cycle will end. Accordingly, it has fallen more than 7% since it reached record highs in early May. Gold prices are highly sensitive to high interest rates as they reduce the attractiveness of non-interest-paying gold. Accordingly, a stronger dollar makes gold less attractive to overseas investors.
“Gold prices seem to be in the range of $1,900 to $1,940 per ounce for now,” said Michael Hewson, chief market analyst at CMC Markets. Also, the potential for further upside will likely be determined by US CPI figures.” says.
Elsewhere, the Bank of Canada is heading for a second consecutive quarter percentage point hike Wednesday after a month of economic data revealed resilient growth. to other precious metals cryptocoin.com Looking at it on an outlook, spot silver was steady at $23.06 an ounce, while platinum rose 1.1% to $918.46 an ounce. Palladium fell 0.1% to $1,242.73.
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