Gold Price Surges Above $2,460 Amidst Pressure on US Bond Yields and Dollar Ahead of NFP Report
As the Gold price (XAU/USD) continues to climb above $2,460 in Friday’s European session, investors are closely watching the upcoming US Nonfarm Payrolls (NFP) data for July, set to be released at 12:30 GMT. This data will provide crucial insights into the labor market and could impact market speculation on a potential US Federal Reserve (Fed) rate cut in September.
The NFP report is expected to show a decrease in new job additions for July, with the Unemployment Rate predicted to remain steady at 4.1%. Additionally, the Average Hourly Earnings data will be closely monitored for indications of wage growth, which can influence consumer spending and inflation.
Amidst these economic indicators, geopolitical tensions between Iran and Israel have also heightened the appeal of Gold as a safe-haven asset. Iran’s vow to retaliate against Israeli actions has added to the uncertainty in global markets.
Key Market Factors Driving Gold Prices to All-Time Highs
- Gold price nears $2,470 as US bond yields weaken, pushing investors towards non-yielding assets like Gold.
- Speculation of a Fed interest rate cut in September strengthens as US Treasury yields hit a six-month low.
- Fed Chair Jerome Powell’s dovish stance on interest rates further fuels expectations of a policy pivot in September.
- Weaker economic data, including high jobless claims and lower Unit Labor Costs, point to a slowdown in US labor demand.
Technical Analysis: Gold Price Trends Above $2,460
Gold price shows a channel pattern on a daily timeframe, with support at the 50-day EMA near $2,370.
The RSI indicator is approaching 60.00, signaling a potential shift in momentum towards the upside.
A break above the all-time high of $2,483.75 could lead to further upside movement in Gold prices.
On the downside, a long-term support level lies at $2,225, indicating a potential floor for price corrections.
Understanding Gold: FAQs for Investors
Gold is a widely recognized safe-haven asset, often used as a hedge against inflation and currency depreciation.
Central banks hold significant Gold reserves to support their currencies and improve economic stability.
Gold prices are inversely correlated with the US Dollar and Treasury yields, making it a popular asset during times of economic uncertainty.
Factors such as geopolitical events, interest rates, and the strength of the US Dollar can impact the price of Gold.