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USD Lower Ahead of NFP
Ahead of the latest US jobs data due today, the US Dollar has turned lower. The move comes despite the Fed this week pushing back against near-term rate-cut calls. The sell-off is partly linked to position covering ahead of the data. With a weaker figure expected on the headline NFP reading and on the back of the recent uptick some longs have decided to take profit ahead of the data.
US Yields Slipping Post-FOMC
Another view is that, with the Fed reaffirming the message that rate cuts are coming this year, traders are looking beyond the shift in near-term signalling. Indeed, US yields have been falling in recent days, despite a more hawkish tone from the Fed on Wednesday. However, another element here is the fall in regional banking stocks this week on the back of the Fed ending its Bank Term Funding Program. The BTFP was set up on the back of the Silicone Valley Bank collapse last year and with the program now expired there are fears of fresh liquidity issues for lenders.
US Jobs Data Up Next
This uncertainty, along with the downturn in USD is helping drive safe haven support for gold. Looking ahead to today’s data, there is room for the rally in gold to continue if we see any undershooting of forecasts. Along with the headline jobs figure, wages growth will also be closely watched. However, should data surprise to the upside again, this will no doubt further dilute near-term rate-cut expectations, driving USD higher again and weighing on gold.
Technical Views
Gold
The correction lower in gold found support into the rising trend line with price now turning higher once again. 2069.41 is the immediate hurdle for bulls to overcome which, if breached, opens the way for a move up to 2151.15 next in line with bullish momentum studies.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.