Gold Price Forecast: XAU/USD struggles to capitalize on post-NFP bounce from multi-week low – by hareshmenghani Gold Commodities Fed InterestRate XAUUSD
last hour. The XAU/USD currently trades around the $1,940 region and for now, seems to have stalled its modest recovery move from the lowest level since July 11 touched on Friday.
The closely-watched monthly jobs data from the United States showed that the economy maintained a moderate pace of job growth in July. Furthermore, the readings for May and June were revised down, suggesting that demand for workers was slowing. This halted the recent surge in Treasury yields and weighed heavily on the on Friday, which was seen as a key factor that prompted some short-covering around the Gold price.
That said, solid wage gains and an unexpected downtick in the unemployment rate pointed to continued tightness in the labour market. This, in turn, reaffirms market expectations that the Federal Reserve will keep interest rates higher for longer and assists the USD to attract some dip-buying on the first day of a new week. A stronger buck tends to act as a headwind for the US Dollar-denominated Gold price and is seen exerting some downward pressure.
Apart from this, the underlying bullish sentiment around the global equity markets, bolstered by continued support from the Chinese government, contributes to the mildly offered tone surrounding the safe-haven precious metal. The USD bulls, however, seem reluctant to place aggressive bets ahead of the crucial US consumer inflation data, due for release on Thursday. This, in turn, could lend some support to the Gold price and help limit the downside.
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