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Gold Falls on Monday
Gold prices are seeing decent selling interest across early European trading on Monday. The move comes amidst an uptick in USD on the back of a bumper set of US jobs figures last week and hawkish commentary from Fed’s Powell over the weekend.
US Jobs Soar Again
On Friday, the NFP for January was seen rising to 353k from an upwardly revised 333k prior. This was well above the 187k the market was looking for and shows that the US economy continues to add jobs at a solid pace. Along with the headline beat, the unemployment rate was seen holding steady at 3.7% while average wages surged higher to 0.6% from 0.4% prior, above the 0.3% the market was looking for.
Bearish Risks for Gold
On the back of the recent pushback we’ve heard from the Fed against those calling for near-term rate cuts, the data was firmly hawkish. Indeed, over the weekend we heard Fed chairman Powell warning that the Fed would likely not cut rates in March given recent data strength and would need to see stronger signs that inflation is returning to target. Given the fresh move higher in wages growth, the market is now sensing that the road to rate-cuts will not be as short as previously expected. Traders are currently pricing in a cut by June. However, if data remains firm near-term this could easily be pushed out, weighing on gold further.
Technical Views
Gold
Gold prices continue to be held up at the 2069.41 resistance level. Price is now testing below the rising trend line which, if breached, opens the way for a test of the 1973.51 level next in line with falling momentum studies readings. Below there 1871.04 is the longer run bear target.
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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.