- Gold price trades on a softer note near $2,295 on Monday.
- The Nonfarm Payrolls arrived at 175K in April vs. 315K rise prior, weaker than expected.
- Fed’s Bowman said she remains willing to raise rates further if data shows inflation progress has stalled or reversed.
Gold price (XAU/USD) loses its recovery momentum around $2,295 on Monday during the early Asian session. Investors will keep an eye on Fedspeaks this week, along with the first reading of the US Michigan Consumer Sentiment Index for May on Friday. Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, edges higher to 105.12, bouncing off nearly one-month lows.
The US Employment data on Friday showed some signs that the US economy is slowing. The Nonfarm Payrolls (NFP) came in at 175K in April from 315K rise (revised from 303K) in March, weaker than 243K expected. This figure registered the smallest gain since October 2023. Additionally, the Unemployment Rate ticked up to 3.9% and Average Hourly Earnings declined by 3.9% YoY in April. Finally, the ISM Services PMI fell into contractionary territory, arriving at 49.4 in April from 51.4 in March, below the market consensus of 52.0.
After the data release, the probability of the Federal Reserve (Fed) rate cut increased, with traders expecting 38 basis points (bps) of rate cuts toward the end of the year. The precious metal climbed to $2,320 due to the downbeat US economic data but erased its earlier gains after the hawkish remarks from the Fed.
Fed Governor Michelle Bowman was hawkish in a recent interview, saying that she’s willing to hike rates if inflation stalls or reverses. Meanwhile, Chicago Fed President Austan Goolsbee stated that the latest US employment report was solid, emphasizing that current monetary policy is restrictive. These comments from Fed officials, along with the risk-on mood, diminish the appeal of non-yielding metals.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.