- Gold price bulls are in the money, but the target remains higher.
- It all depends on the NFP data on Friday.
The price of Gold It rose on Thursday, moving from a low of $1,953.44 to a high of $1,983.15. The dollar weakened after the approval of the agreement on the debt ceiling in the House of Representatives on Wednesday.
US lawmakers appear to have averted a financial crisis with the news that the US debt ceiling deal has passed the House of Representatives. The deal involves raising the debt ceiling for two years and now goes to the Senate, where it is expected to pass well before the June 5 deadline.
Due to a combination of factors, the Dollar Index fell to 103.52, the lowest level in a long time, as new data and comments from some Fed officials raised bets that the central bank will pause in June. . First, the fall in productivity was revised downwards, while the ISM PMI showed that the manufacturing sector contracted for the seventh consecutive month. Initial jobless claims and the ADP report beat forecasts, but the data indicates a less tense job market.
As for the Federal Reserve, Fed Governor Philip Jefferson and Philadelphia Fed President Patrick Harker suggested the central bank would skip a rate hike at the next meeting. This all comes ahead of the US Nonfarm Payrolls release on Friday. A good result will likely reignite the dollar’s recovery and weigh on the gold price.
In general, expectations are that the Federal Reserve may not raise interest rates when its policy committee meets later this month. CME’s Fedwatch tool shows a 75% probability that the central bank will keep rates unchanged.
US payrolls probably slowed slightly in May, advancing at a still strong pace of over 200,000 for the second month in a row. We also expect the unemployment rate to remain unchanged at its record low of 3.4%, and wage growth to be 0.3% m/m (4.4% y/y)”, analysts at TD Securities said.
Gold technical analysis
The above chart is a what-if scenario for the price of gold as we head into the Non-Farm Payrolls event on Friday. We are seeing a pump to the same highs at about a 50% expansion of the range between the highs and lows of the previous swings, where support held on Thursday. The scenario illustrates a possible sell-off around the NFP data once the equal highs are swept.
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.
