Choppy Session Continues for Gold – Focus on the US NFP
During Friday’s Asian trading session, the yellow metal maintained its bullish early-day rally and drew some further bids around the $1,810 level, as the weaker US dollar supported gold. The US Dollar Index (DXY) refreshed its monthly low in Asia before recently paring the losses to 92.20.
The upbeat market sentiment was seen as one of the key factors behind the bearish moves in the US dollar. The weaker greenback tends to underpin the gold prices, as the price of gold is inversely related to the price of the US dollar. Apart from this, the cautious mood ahead of the key US Non-farm Payrolls (NFP), and mixed data concerning the coronavirus from Australia and New Zealand, is also boosting the safe-have appeal of the yellow-metal.
In addition to this, the buying bias surrounding the yellow-metal prices was also sponsored by the reports suggesting that Australia has logged a record high in coronavirus cases, and the number of daily cases in the UK has also jumped to a fresh multi-day high, leading to regulators pushing for a booster jab plan in September. On the other hand, China has recorded no new cases of the virus. The market sentiment improved the previous day, as extra catalysts for the US jobs report for August marked a soft NFP, which keeps the market trading sentiment positive.
In the meantime, the receding hospitalization numbers in the United States and vaccination optimism in the UK also had a positive impact on the market trading mood. This was seen as one of the key factors that kept a lid on any extra gains in the gold prices. At the time of writing, the precious metal was trading at 1,810.92, and consolidating in the range between 1,809.03 and 1,814.90.
US Non-farm Payrolls (NFP) Ahead – What to Expect?
Despite the cautious mood ahead of the key US Non-farm Payrolls (NFP), mixed data concerning the coronavirus, from Australia and New Zealand resulted in the market trading sentiment maintaining its upward overnight performance, and it remained well bid on the day. The S&P 500 Futures rose by 0.20% intraday, tracking the Wall Street benchmarks that closed mildly positive on the day. However, this could be attributed to the latest optimism over the receding hospitalization numbers in the US and fewer cases from New Zealand, which gave investors some hope.
Meanwhile, China has recorded no new coronavirus cases, and the UK is pushing for a booster jab plan in September. This resulted in optimism, and kept the sentiment in the market positive. It was further lifted after the US jobs report for August marked a soft NFP, versus 750K expected and 943K prior, doing away with Fed tapering concerns.
Elsewhere, the previous release of upbeat Australian trade balance figures also played a significant role in underpinning the market trading mood. Hence, the prevalent buying bias surrounding the market trading sentiment was a key factor that kept the US dollar lower.
US Dollar Update & Impact on Gold
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