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Market Analysis

Gold bounces again above $2,500 on data on US jobs
Amos Simanungkalit · 157.5K Views

14

Gold (XAU/USD) surged back above $2,500 on Thursday after rebounding from the previous day’s low of $2,471. The recovery came in response to weaker-than-expected US job openings data for July, which intensified concerns about a potential economic slowdown.

Gold Rebounds on Weaker Job Data

Gold's recovery was fueled by the release of disappointing US job data, which heightened demand for the safe-haven asset. The data suggested that interest rates in the US might decrease more quickly than anticipated, benefiting gold as it lowers the opportunity cost of holding a non-yielding asset.

According to the US Bureau of Labor Statistics, the Job Openings and Labor Turnover Survey (JOLTS) reported a decline to 7.673 million in July from a revised 7.910 million in June, falling short of the expected 8.100 million. This weaker data aligns with concerns about the fragile US labor market, which have influenced Federal Reserve interest rate expectations. Fed Chairman Jerome Powell had previously highlighted these job market issues during his Jackson Hole Symposium speech last month.

The disappointing manufacturing data from earlier in the week had already sparked a global market downturn, further exacerbated by concerns over a potential AI tech bubble burst. As a result, the likelihood of a 0.50% rate cut by the Fed in their September 18 meeting, as opposed to the more conventional 0.25%, has increased from about 31% to 45%.

Upcoming economic releases include the ADP Employment Change and Jobless Claims on Thursday, but the most significant event will be the US Nonfarm Payrolls (NFP) report on Friday. A smaller-than-expected NFP increase could bolster the case for a larger rate cut.

On the geopolitical front, Reuters reports that US negotiators are working on a new ceasefire deal for Gaza, while the conflict in Ukraine continues.

Technical Analysis: Hammer Candlesticks Indicate Potential Recovery

Gold (XAU/USD) has formed two consecutive bullish Hammer candlesticks (highlighted in the chart below). If Thursday closes as a strong green day, it could confirm a potential continuation of the broader uptrend.

 

 

 

 

 

Paraphrasing text from "FX Street" all rights reserved by the original author.

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