Gold was trading up on Monday morning in Asia. Pullback of the dollar gave the yellow metal a boost. The Fed’s dovish stance on interest rates hike combined with lower levels of US labor force participation had gave some pressure to the dollar last week which helped in the yellow metal’s surge.
The most important factor for the rise of precious metals markets on Friday is fall of US Treasury yields. It fell despite stronger than expected employment payrolls data. Traders for the second straight day pushed out cash rate expectations on the view that central banks may be slower to move on inflation.
On the other hand, the latest rebound in the US dollar due to the solid NFP data despite of the cautious risk tone could question the gold’s bullish move ahead of Fed Chair Jerome Powell’s speech.
Nonfarm Payrolls (NFP) in the US rose by 531,000 in October, the data published by the US Bureau of Labor Statistics showed on Friday. This reading came in better than the market expectation of 425,000. Additionally, September’s print got revised higher to 312,000 from 194,000. This data gave dollar a boost. Whereas Annual wage growth is just shy of 5% yearly, adding to inflationary pressures. .
TD Securities Head of Global Strategy Bart Melek expressed his afterthoughts on the US Nonfarm payrolls data and its impact on gold price. The key notes were “Gold rallied despite the US economy adding an impressive 531,000 positions and the unemployment rate dropping to 4.6% in October.”
“The reason for that was the unchanged participation rate, which remained at 61.6%.” “That essentially means that the labor force participation is still at problematically low levels, and we are nowhere near full employment.”
On Friday, the U.S. Congress passed a $1 trillion infrastructure bill to repair the nation’s airports, roads, and bridges.
XAU/USD 4 Hour Chart:
Latest
Popular
Trending
Archives
Search
Top Tags