Gold Breaks New All-Time High!
Gold (XAU/USD) rallied to a new record high of $3,586 on Friday following the release of disappointing US Nonfarm Payrolls (NFP) data. At the time of writing, the precious metal was trading around $3,580, up nearly 0.95% on the day, as investors turned to safe-haven assets amid a weakening US dollar (USD) and falling Treasury yields.
The US economy added only 22,000 jobs in August, well below the 75,000 expected, while July's figure was revised slightly higher to 79,000. The Unemployment Rate rose to 4.3% from 4.2%, the highest since late 2021, while Average Hourly Earnings increased 0.3% month-on-month and 3.7% year-on-year, both in line with estimates.
The latest labor market indicators point to declining momentum. ADP private payrolls data showed an increase of 54,000 in August, below expectations and the previous figure of 106,000, while JOLTS Job Openings fell to 7.18 million from 7.36 million. Initial Jobless Claims for the latest week reached 237,000, above expectations of 230,000 and the previous figure of 229,000, underscoring signs of a gradual weakening in labor demand. Meanwhile, the ISM Employment Index for Manufacturing (43.8) and Services (46.5) remained in contractionary territory. This string of weak data has reinforced the view that the Federal Reserve is now more concerned with labor market risks than persistent inflation.
Overall, this data underscores a labor market that is losing momentum, reinforcing expectations that the Federal Reserve will ease policy at its September 16-17 meeting. Although the market had already expected a cut of nearly 25 basis points (bps), the weak NFP figures fueled speculation that the central bank might opt for a larger, 50 bps, measure to counter slowing growth. For gold, the combination of low Treasury yields, widespread dollar weakness, and the Fed's dovish sentiment provided solid support, allowing bullion to trade in uncharted territory at record levels.
Source: Newsmaker.id
