Gold rises on weaker NFP data, Eyes on CPI
Gold soars on the back of a weaker dollar
Employment data came in lower than expected at a turning point for markets
NFP report adds jobs at its slowest pace since December 2020
Gold prices faces strong resistance near $1937
Economic news affecting gold movements:
Gold has experienced an upward trend since the end of last week, benefiting from the weakening of the US dollar against major currencies. This was prompted by the release of employment data, which fell below expectations.
In this context, the largest economy in the world, the US, added jobs at the slowest pace since December 2020, adding 209,000 jobs compared to the previous reading, which recorded 306,000 jobs. Meanwhile, the unemployment rate fell as expected to 3.6% in June from 3.7%.
Austin Goolsbee, a member of the Federal Reserve, noted that while the job market remains strong, it is currently subdued, and cautioned against making judgments based on a single month's employment data. He also emphasized the need to be cautious when using wage data as a key indicator of inflation, as prices typically change before wages.
During their June meeting, most Federal Reserve officials indicated the possibility of further monetary policy tightening in the near future, albeit at a slower pace.
Market participants are eagerly anticipating the release of significant economic data this week, including the consumer and producer price indices from the US today.
Important pivot and technical levels contributing to gold movements:
If gold fails to maintain stability above $1937, it could resume its decline and test the support level of $1925. If this support level is breached, the decline may continue towards $1910. In the event that $1910 is also broken, the decline could extend further to test the $1900 level.
On the other hand, if gold manages to surpass the resistance level of $1937 and maintains stability above it, it may pave the way for further gains towards $1950. Breaking through $1950 could potentially lead to an extended rise towards the $1966 level.