Gold Moves Down On Usd Recovery

Gold Moves Down On Usd Recovery by Andrew Blumer last updated on July 23, 2024

Gold (Xau/Usd) Moves Below $2400

Gold (XAU/USD) encountered fresh supply near $2385, causing the yellow metal to end its three-day winning streak on Monday. The yellow metal is mainly under pressure as the greenback is staging a modest recovery while the PBoC has paused the buying of gold temporarily.

However, experts believe that political uncertainty and the elections in the USA could help Gold stage some impressive gains once again.

Nfp Report Shows A Weaker Job Market

Friday's NFP report showed a reading of 206K against the 190K forecast with a jobless rate of 4.1% during June. The overall data was mixed and showed a weaker job market, which will also likely translate into softer CPI print. This has sparked the debates about September's rate hike once again, which caused weakness in the USD last week.

As of now, there's still a 77% chance that the US Federal Reserve will cut rates during September. So, if that turns out to be true, it will be a major bullish break for gold, which doesn't prosper at higher rates.

The meeting minutes also showed that the FOMC members are confident that inflationary pressure is easing. So, the prospects of rate cuts have gone higher once again, which could help Gold in the near future.

Additionally, there is a lot of political uncertainty in France, Europe, and other areas of the world. So, that's also something that is expected to boost the demand for metals such as Gold and Silver.

Elsewhere, the People's Bank of China (PBoC) has once again not bought gold for the 2nd month in a row. According to experts, it seems that the PBoC is not buying gold due to its higher prices. So, once a pullback happens in the gold (XAU/USD) prices, the PBoC will start buying gold again.

Right now, China is one of the top buyers of gold bullion, and any hesitation from China will weigh heavily on gold.