Gold Volatile After Us Nfp Data

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Gold Volatile After Us Nfp Data

Gold (Xau/Usd) Volatile After Us Nfp Data

Gold (XAU/USD) dropped below the $2500 handle on Monday. Earlier, the yellow metal was testing its all-time highs, but that has now changed as the market is more volatile than ever following the release of the US NFP.

The earlier reaction of Gold (XAU/USD) to the NFP was a jump higher. However, the yellow metal then reversed the directions and started to move lower once again.

Weaker Nfp Report Sends Us Dollar Lower

The August NFP report was below forecast, but what's more worrying is that the data from June and June was also revised lower. The overall message from the recent NFP reports is that the labor market has turned weaker.

The weakness in the labor market has increased the chances of a 0.5% rate cut from the US Federal Reserve. But even if the US central bank doesn't deliver it, a 0.25% rate cut is now almost certain.

In general, the September rate cut will be good news for Gold (XAU/USD) as it lowers the opportunity cost of buying non-yielding assets.

One key detail from the August NFP report was that the jobless rate has gone down from 4.3% to 4.2%. Also, the wage growth in August was +0.4%, which was against the forecast of 0.3%.

These things allowed the US Dollar to rise once again against the fiat currencies and even metals such as Gold and Silver.

That's why the Gold (XAU/USD) eventually moved below the $2500 handle and is now seen near $2490 on Monday.

The bigger picture is that gold (XAU/USD) prices remain supported, but traders are worried about the US economy's outlook. According to Fed Waller, it is important to cut rates to keep the forward momentum of the economy.

Amidst all of this, Gold (XAU/USD) traders are also looking forward to the release of the US PPI and the US CPI. Both of these data releases from the USA can also impact the Gold (XAU/USD) prices.

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