XAUUSD CMP $2639 Gold price (XAU/USD) struggles to capitalize on its goodish intraday bounce from a one-and-half-week low touched earlier this Friday, though it manages to stick to modest gains through the first half of the European session.
🟢The US Treasury bond yields remain suppressed amid bets that the Federal Reserve (Fed) will lower borrowing costs in December. This, in turn, keeps the US Dollar (USD) near a multi-week low and acts as a tailwind for the non-yielding yellow metal.
Apart from this, a slight deterioration in the global risk sentiment, geopolitical tensions and trade war fears turn out to be other factors underpinning the safe-haven Gold price.
That said, expectations for a less dovish Fed, bolstered by hopes that US President-elect Donald Trump’s policies will boost inflation, keep a lid on any further gains for the XAU/USD. Traders also seem reluctant to place aggressive directional bets ahead of the release of the US Nonfarm Payrolls (NFP) report.
In the lead-up to the US NFP showdown, the US Dollar (USD) has found fresh demand amid a slight deterioration in risk sentiment and profit-taking.
Key Factors Impacting XAUUSD/Spot Gold Price this week: Read here.
🟢Disappointing Jobless Claims
Gold price snapped its recovery momentum and returned to the red despite the sell-off in the US Dollar and the US Treasury bond yields. The disappointing US weekly Jobless Claims data failed to lift the sentiment around Gold price.
🟢Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30, the Labor Department said. Markets had forecast 215,000 claims for the latest week.
🟢South Korea Political Tensions
Investors’ sentiment sags on lingering political tensions in South Korea as the main opposition Democratic Party announced an impeachment motion against President Yoon Suk Yeol will be put to a vote on Saturday, per Asia News. Yonhap carried headlines citing South Korea’s opposition parties saying lawmakers were on standby after receiving many reports for another martial law declaration.
🟢Chinese Economy
Persistent worries over China’s economic slowdown and US-Sino trade war undermine the broader market sentiment. Traders are cautious already and resort to repositioning before the US labor data due later in American trading.
🟢Non Farm Payrolls Data
Economists expect the US economy to have added 200K jobs in November after creating a meagre 12K jobs in October in the face of hurricanes and the Boeing strike.
If the headline NFP figure comes in below 200K, it would suggest a continued cool down in the US labor market, calling for further rate cuts by the Fed beyond December. The dovish narrative is set to bode well for the non-interest-bearing Gold price at the expense of the USD.
On the other hand, a strong NFP print is likely to strengthen the recent speculation that the Fed could pause its rate-cutting cycle after the expected rate reduction in December.
🟢Fed Decision
The CME Group’s FedWatch Tool shows that the chances of the Fed lowering rates by 25 basis points (bps) later this month stand at about 70%, slightly down from 75% a day ago.
🟢Trump’s Trade Tariff
Concerns about US President-elect Donald Trump’s trade tariffs and their effect on the global economic outlook temper investors’ appetite for riskier assets and lend support to the safe-haven XAU/USD.
XAUUSD: Crucial Price Zones:
🔻 BZ $2606/2585/2569/2552
🔺SZ $2685/2707/2727/2747
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