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Gold is aiming for direction fueled by jobs data

Traders are fighting for direction as gold awaits crucial jobs data. NFP will shed some light to the future of hiikes.

Jobs data may save the yellow metal

After falling more than 1.70% on Tuesday, the gold price surges throughout the US session. Fed Chairman Jerome Powell’s hawkish speech to the US Congress strengthened the US dollar. 

Yet, Friday’s and next week’s US jobs and CPI data might impact the Fed’s interest rate policy. At the present moment, the XAU/USD exchange rate is at $1,831.87. Gold rebounded after it touched a low of $1,812.09.

Following the announcement of US GDP statistics, the XAU/USD exchange rate rose substantially. Initial Jobless Claims for the period ending March 4th increased by 211K, above expectations of 195K, according to the Bureau of Labor Statistics.

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The number of job postings exceeds projections; rising unemployment claims might relieve the tight labor market. A strong Nonfarm Payrolls data for the United States on Friday would put pressure on the Fed to keep prices from rising. Thus, more tightening would be required.

Bulls and bears clash and fight for direction

US Treasury yields have retreated from their peaks. The 10-year bond is now at 3.944%, a decline of five basis points that provides relief to XAU/USD purchasers and boosted the rebound.

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Gold bulls are apparently meeting the bears in the middle as per the damage done a day before. Prices rebounded to the 200 day average, however the last two candles are bearish indicating a resistance at the $1,835 level. In case the bulls manage to break through, we could see a rebound back to the levels from a few days ago.

Gold futures

Gold futures 1H chart, source: tradingview.com, author’s analysis

 

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.

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