- Gold rises 0.29% while investors expect the key non -agricultural payroll report on Thursday.
- ADP points out that hiring has stagnated; Microsoft will cut 9,000 jobs, feeding deceleration fears.
- Geopolitical tensions are relieved, but the deadline for Trump tariffs keeps commercial risks alive.
The price of gold rises cautiously during the North American session while operators prepare for the publication of the latest non -agricultural payroll figures (NFP) in the United States (USA), which could be crucial for the path of interest rates established by the Federal Reserve (Fed). At the time of writing, the Xau/USD negotiates at $ 3,348, rising 0.29%.
The latest employment reports, revealed by ADP, showed that companies have stopped hiring instead of saying goodbye while adjusting to the current economic environment. The news that Microsoft is cutting 9,000 jobs paints a gloomy panorama for the labor market.
On Thursday, the US Labor Statistics Office will publish the latest Employment Report, which is expected to show that the economy added 110,000 Americans to the workforce, below the 139,000 added in May. The unemployment rate is expected to increase 4.2% to 4.3%, even within the 4.4% projections established by the Fed in its last summary of economic projections.
Geopolitical risks decreased dramatically when the possible 60 -day truce was known in Israel’s incursion in Gaza. This, together with the truce agreement between Israel and Iran, limited the recovery of gold, with the yellow metal staggering in its attempt to recover the level of $ 3,400.
Apart from this, the operators approach moved to the commercial agreements between the US and their peers. With the deadline of July 9, around the corner, the president of the USA, Trump, said he will not extend the deadline to resume the highest tariffs.
This weekly week, before the US Independence Day on July 4, it will have the initial applications for unemployment and NFP subsidy on Thursday.
What moves the market today: the price of gold rises while US yields and the US dollar advance
- The gold rally is expected to continue, since the data revealed by the World Gold Council indicated that the central banks added 20 tons of the yellow metal in May, being Kazakhstan the leader. The National Bank of Kazakhstan reported 7 tons, followed by the Central Bank of Türkiye, which reported 6 tons, and the National Bank of Poland.
- The ingot advances even when the yields of the US Treasury bonds go up. The 10 -year Treasury note of the USA yields 4,296%, an increase of five basic points. The real US yields, which are calculated by subtracting inflation expectations of nominal performance, are also rising about six basic points to 2,006%.
- The ADP employment change report showed that private companies decreased hiring by 33,000 in June, well below the estimates of 95,000. The report showed that service providers reduced payrolls in 66,000 in June due to falls in professional and business services.
- The approval of the “One Big Beautiful Bill” of the US president, Donald Trump, is in doubt since the Hard Republicans of the Chamber are looking for modifications to the bill, which Trump wants to be signed before July 4.
- Trump announced a commercial agreement with Vietnam, under which US products could be exported with 0%tariffs. In contrast, the US imposed a 20% tariff on Vietnam’s assets and 40% of transfers.
- The president of the Federal Reserve, Jerome Powell, revealed that the policy is moderately restrictive and added that he cannot say if July is too early to cut rates, although he would not rule out anything. He said that if it weren’t for the tariffs of President Donald Trump, the US Central Bank would probably have trimmed the rates even more.
- Monetary markets suggest that operators are discounting 63.5 basic points of relaxation towards the end of the year, according to Prime Market Terminal data.
Fountain: Prime Market Terminal
XAU/USD technical perspective: The price of gold ready to challenge $ 3,400
The upward trend of the price of gold is maintained, with the operators ready to exceed the peak of this week of 3,358 $ that clears the way to test the level of 3,400 $. The impulse remains bullish, as the relative force index (RSI) shows. Therefore, the path of lower resistance is inclined to higher prices.
If the Xau/USD exceeds $ 3,400, a $ 3,450 test and the historical (ATH) of $ 3,500 is expected. On the contrary, if gold falls below the simple mobile average (SMA) of 50 days at $ 3,320, the first support would be $ 3,300. A rupture of this last will expose the minimum oscillation of June 30, $ 3,246.
GOLD – FREQUENT QUESTIONS
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
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.
