Gold Price Forecast: Slightly weaker XAU/USD is justified in the short term – Commerzbank

FXStreet Insights Team FXStreet

Gold price went on a rollercoaster ride on Friday following the release of the US employment report. Strategists at Commerzbank analyze the yellow metal’s outlook.

Gold price weaker for now

More jobs were created in December than expected. However, the previous months' data was revised downwards. Nevertheless, there is no evidence of pronounced weakness in the US labor market. Rather, the data may have encouraged those who continue to expect a soft landing for the US economy and as a result, rather late interest rate cuts by the Fed, which explains why Gold is now trading lower.

Although we are far less optimistic – our economists continue to believe that the US will still slip into recession – the robust labor market supports our view that the first interest rate cut by the Federal Reserve will probably not take place until May, rather than earlier as many market participants expect. In this context, we believe that a slightly weaker Gold price is justified in the short term.

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