Discover the historical impact of US jobs report on gold prices and how it can affect your investments. Get ready for the August jobs report on Friday, September 6, with expectations for a 160,000 rise in Nonfarm Payrolls following July’s disappointing increase.
Economic Indicator: Nonfarm Payrolls
The Nonfarm Payrolls release by the US Bureau of Labor Statistics presents new job creation in non-agricultural businesses. This data can trigger volatility in the Forex market, with high readings bullish for the US Dollar and low readings bearish. Market reaction depends on the entire BLS report, not just the headline figure.
Methodology: How Gold Reacts to NFP
We analyzed gold price reactions to NFP prints at 15 minutes, one hour, and four hours post-release. The deviation between actual and expected NFP results was compared using the FXStreet Economic Calendar data. A positive NFP print is USD-positive, leading to a gold price decline.
Results: What You Need to Know
Out of 35 releases, there were 10 negative and 25 positive NFP surprises. Gold moved up by $7.26 on average after disappointing prints and declined by $4.86 on positive surprises. The correlation with NFP surprises slightly weakened over time, with the strongest negative correlation seen at 15 minutes and one hour post-release.
Factors like profit booking after the initial reaction and details of the jobs report impact gold’s inverse correlation with NFP surprises. The US Federal Reserve’s data-dependent approach and revisions to previous readings also play a role in market reactions.
Gold FAQs: Key Insights
Gold is a safe-haven asset, a hedge against inflation and depreciating currencies, and has an inverse correlation with the US Dollar and risk assets. Central banks are major gold holders, using it to support currencies in turbulent times. Geopolitical instability and interest rate changes can also impact gold prices.