Gold prices slipped after skyrocketing at the weekend. The spot of that commodity prices fell by 0.3% to $1,675.94 an ounce at 1:15 p.m. GMT, as did gold futures that fell to $1,680.90.
In the trading session on Monday (07/November) night, the XAU/USD chart was observed not far from the range of $1,678.54. That happened after a gain of more than 3%.
It is especially after the United States Employment Data was released on Friday. Comments from Fed officials have also begun to vary and some are already expecting a rate hike that is not as aggressive as before.
However, the experts assess that the condition of gold prices today is only a corrective reaction to the high rise on Friday. It means that everything can change in the future.
NFP increased by 261 K in October
For information, gold gained 3.12% after the United Stated Unemployment reportedly jumped to 3.7% from 3.5% previously. In fact, other employment data such as NFP increased by 261k in the October 2022 period.
It means that the increase was more than the consensus estimate of only 200k. Meanwhile, average hourly earnings growth rose by 0.4 percent for Month-over-Month in actual terms versus an estimate of just 0.3%.
The USD collapsed in response to the data, and gold surged. Most of the data is still enough for the Fed to raise their interest rates in large numbers once again this month.
However, some experts believe that the growth of the America’s labor market will slow down. That is even if it is still in a positive range.
Effect of US Inflation Data on Gold Prices
While the data hasn't given a clear picture of how the labor market is developing, the analysts already seeing unemployment creep up. This apparently has an effect in the market.
It dimmed the risk-on sentiment as it pushes the Fed a little closer to easing. That opinion was said by Hathorn added. This week the market will pay attention to the US inflation report.
Daniela Hathorn of Capital.com said that if the United states Inflation (CPI) report this week also weakens, then there is a possibility that risk appetite will dim again. Then, gold will rise further.
In contrast, analyst Matt Simpson of City Index justures anticipating a decline in gold prices. The inflation data in America has the ability to support or suppress this precious metal.
Although the market currently supports a 50 basis point rate hike, hot inflation is likely to open up opportunities for a 75 bps hike. It can be pushing the dollar higher, and gold lower.
EUR / GBP moved in Bearish Situation
The Euro currency pair against the Pound Sterling (EUR/GBP) over the past few weeks has been bearish. The price moved from Resistance level 2 (0.88678).
That was until it broke through Resistance 1 (0.87650), and Support 1 (0.86692). However, the price weakening in the H4 timeframe has not yet managed to break through the Support level 2 (0.85716).
The euro briefly rebounded towards resistance 1. Now the price has the potential to weaken again towards 0.860. This opportunity will be even stronger.
It is especially if the price manages to break through and close above the level of 1.696. In addition, this chance is also supported by many aspects.
Meanwhile, GBP/USD is More Bullish
The Pound sterling currency pair against the US Dollar (GBP/USD) over the past few weeks has been bullish. That can be seen from several releases lately.
The pound had corrected towards support 1 and now the price has the potential to signal Buy. This opportunity will be even stronger if the price manages to break through.
It can be stronger if it closes above 1.138. In addition, the commodity channel index indicator also supports that situation.
