Despite Wednesday’s bounce, XAUUSD price stays subjected to downside risks amid hopes for diplomacy on the Ukraine crisis while Russia continues its hostilities on the ground. In the meantime, the price action in the US Treasury yields will continue to have a significant impact on the non-yielding gold price, in the face of recession risks and soaring inflation.
The data were bad for the US Dollar, and gold prices rose 0.83% as traders sought to profit off the low support for the US Dollar on the fundamental side of things. The market projection is for employment change to drop from 678K to 485K and the unemployment rate to fall from 3.8% to 3.7%.
We need to see a match for Gold to be tradable on the NFP report. Higher-than-expected employment change must come with a static or lower unemployment rate to produce a potential for a downward track in gold prices. In the same vein, a buying opportunity on the XAUUSD may present if there is a lower-than-expected employment change and a static or higher unemployment rate. A conflict presents a no-trade situation, and the gold price forecast will follow the pre-existing fundamentals at play in the market.
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