Gold Rallies As US Dollar Struggles Post NFP

The American Dollar faces difficulty finding ground, it is down by 1.39%, as the US Dollar Index reading reflects. Speculations that the US central bank could tighten in smaller increases mounted as the labour market gave signs of easing.

The US 2s-10s yield curve inversion, the deepest since the 1980s, and US recession fear increased. Gold price continues to extend its rally following the release of October US Nonfarm Payrolls report, the precious metal is up by more than 2.50%, in growing speculations that an uptick in the rate of unemployment might deter the Fed from aggressive tightening.

Fed Chair Jerome Powell said the Federal Funds rate peak would be higher than September’s projections. Therefore, the XAUUSD is trading at around $1672 amidst a volatile trading session.

The US Unemployment Rate is approaching to 4%, a headwind for the US Dollar. Following the release of the Nonfarm Payrolls, the US Dollar falls further. The US economy added 261K jobs, above estimates of 200K, but what probably rocked the boat was that the Unemployment Rate increased by 3.7% from 3.5% in the previous month, signaling that the labor market is easing amid the most aggressive Federal Reserve tightening cycle.