Gold rises, yen rebounds as markets await key report

The U.S. Nonfarm Payrolls report is highly anticipated, expected to significantly influence market sentiment, with investors closely monitoring the Federal Reserve’s next steps

By Farah Mourad | 4 October 2024

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  • European markets are focused on key speeches from European Central Bank

  • Gold prices have surged to $2,665

  • Crude oil prices continue climbing

The U.S. economic calendar is packed today, with the much-anticipated Nonfarm Payrolls report set to guide market sentiment. Investors are keeping a close watch on the Federal Reserve’s next moves.

In Europe, attention is on multiple speeches from European Central Bank (ECB) officials, who will be addressing the region’s monetary policy stance. Key economic releases include the UK’s Construction PMI, which will provide insights into post-Brexit economic conditions, as well as a notable uptick in French industrial production, which grew by 1.4% in August, surpassing expectations. Germany's economic health will also be assessed through upcoming data, offering further clues into the broader Eurozone’s recovery.

Commodities

Gold has seen renewed interest, climbing to the $2,665 mark as safe-haven demand grows. Geopolitical tensions, particularly the ongoing Middle East conflicts, are pushing investors toward precious metals. Meanwhile, a temporary pullback in the U.S. dollar from its recent highs has also supported gold prices. However, traders are exercising caution ahead of the U.S. employment report, which could significantly impact market dynamics and influence the Federal Reserve’s policy approach.

Oil West Texas Intermediate (WTI) crude prices continue their upward march, with gains extending into a fourth consecutive session. Currently trading near $73.50 per barrel, oil markets are underpinned by fears of potential supply disruptions from the Middle East, which remains a critical hub for global oil output. Heightened tensions between Israel and Iran are fueling concerns over energy security, pushing crude prices higher as the global market braces for possible escalation.

Currencies

The U.S. dollar has edged near a six-week high ahead of the key Nonfarm Payrolls data. The dollar index is on track for its best weekly performance since April, gaining almost 1.5%.

Meanwhile, the Japanese yen, which has experienced significant weakness in recent weeks, saw a modest recovery after Japanese officials emphasized the need for a coordinated approach between monetary and fiscal policies, especially as the country seeks to exit its long-standing deflationary environment.

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