Gold prices eased slightly at the start of the week and are currently trading around $2,500 per ounce. Gold remains on hold ahead of the US Non-Farm Payrolls report on Friday, notes Volkmar Baur, commodity analyst at Commerzbank.
Gold may fall further
“If the report turns out as most analysts expect according to a Bloomberg survey, gold could fall further. The futures market is still pricing in a roughly 30% chance that the Fed will cut rates by 50 basis points in September.”
“However, if the report shows, as expected, that the labor market continues to cool but does not collapse, this probability should be discounted. On the other hand, if the US jobs report is significantly weaker, speculation about a US recession and faster rate cuts will resurface, further supporting gold. A day after the US jobs report, China will also publish data on its foreign exchange reserves.”
“As it has been reported several times in recent months that the Chinese central bank has stopped importing gold, an increase in gold reserves would be a surprise that would also support the gold price. However, this is unlikely to happen.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
