Gold Below $4,100, Waiting for the NFP to Explode?
Gold prices moved flat in the Asian session this Thursday, hovering below the US$4,100 per troy ounce area. The market appeared uncertain of its direction as market participants preferred to wait for the release of the delayed US employment data (Nonfarm Payrolls/NFP) before entering new positions. As a result, gold's movement fluctuated between small gains and small losses.
At the same time, waning expectations for a Fed interest rate cut strengthened the US dollar to its highest level since late May. A stronger dollar makes gold less attractive because this precious metal does not provide a yield (interest), thus limiting its upside potential.
Risk-on sentiment in global stock markets also dampened interest in safe-haven assets like gold. As long as investors remain comfortable investing in riskier assets, the need for refuge in gold tends to diminish, despite concerns about weakening US economic momentum following the prolonged government shutdown.
Under these conditions, the market tends to be cautious about placing too much hope on gold's continued rebound from the psychologically important US$4,000 area. The next direction depends heavily on tonight's NFP release: whether it will trigger a breakout above US$4,100 or drag gold back to test the support below. (asd)
Source: Newsmaker.id
