Gold rockets above $4,500, set for 4% weekly gain post US NFP
Gold price rises on Friday, poised to end with weekly gains of nearly 4% as an employment report in the US was mixed, with the economy adding fewer jobs than projected. Still, the Unemployment Rate ticked lower, yet investors are still betting the Federal Reserve (Fed) to cut rates this year. At the time of writing, XAU/USD trades at $4,507, up 0.65%.
Bullion rallies as weaker payrolls keep Fed cut bets alive
The US economic data weighed on investors’ expectations of lower interest rates in the short term. But for the whole year, traders seem confident that the Federal Reserve would lower rates by 50 basis points.
Digging into the data, Nonfarm Payrolls for December missed estimates and November’s print. Nonetheless, the Unemployment Rate fell, while Average Hourly Earnings came as expected.
Housing data revealed an ongoing slowdown as Building Permits and Housing Starts for October dipped compared to November’s data. Meanwhile, the University of Michigan Consumer Sentiment January preliminary release fared better than projected, even though US households showed worries about inflation in the mid-term.
After the data, the yellow metal fell towards $4,450 before assaulting the $4,500 mark, hitting a daily high of $4,517, shy of the record high of $4,549. The Greenback trimmed some of its earlier gains before reaccelerating higher, as depicted by the US Dollar Index (DXY).
The DXY, which measures the American currency performance against other six, is up 0.33% at 99.16.
Gold traders await next week’s US economic data, led by inflation figures, Retail Sales, regional manufacturing indices surveys, jobless claims and speeches by Fed officials.
Source: FXstreet.com
