Gold struggles not to reverse course before NFP data

The price of gold is fluctuating on Wednesday along with the US Dollar, but it is holding steady around the $2,020s at midday after moving from a low of $2010.09 to a high of $2032.11 so far. At the time of writing, the precious metal is selling for $2020.65 per ounce.

The dollar initially dropped on Wednesday to represent a new bear cycle low, but it has since recovered most of those losses and is now headed back towards 102.00 DXY, making the price of gold slightly less affordable for international buyers.

Early on Wednesday, the price of gold increased to a new 13-month high as investors sought for safe haven assets in the wake of yet another report that revealed sluggish employment growth for the United States amid rising interest rates.

The US dollar fell to a low of 101.415 DXY due to a combination of this week’s data and a report released today that showed US private sector employers added 145,000 jobs in March, below expectations for an increase of 210,000.

The numbers for Wednesday were significantly less than the 242,000 posts added in February. The data, which came out after Tuesday’s disappointing report on US new job postings, fuels speculation that the Federal Reserve is likely to change course in light of mounting indications that the US economy is faltering.

As a result, investors’ recession-related concerns grow and are pricing in Federal Reserve rate reduction later in the year, while a decline in US Treasury yields is supporting the gold price.

The consensus for this Friday’s nonfarm payrolls is 240k, down from 311k in February, while the unemployment rate is projected to remain unchanged at 3.6%. As opposed to 4.6% in February, average hourly earnings are predicted to fall to 4.3% y/y. Notably, the information will be released on Good Friday. We might see some disproportionate moves in the statistics, whether positive or negative, as markets are likely to be relatively thin.