Gold Price Shows Signs of Volatility Contraction Ahead of US Nonfarm Payrolls Data Release

In the Asian session, the price of [[gold]] (XAU/USD) has been displaying indications of volatility contraction around the $2,050.00 mark

Arslan Butt•Friday, May 5, 2023•1 min read

In the Asian session, the price of GOLD (XAU/USD) has been displaying indications of volatility contraction around the $2,050.00 mark, with investors eagerly waiting for the release of the US Nonfarm Payrolls (NFP) data before making any further moves. Meanwhile, the US Dollar Index (DXY) is on a decline due to the Federal Reserve’s expected decision to refrain from raising interest rates amid a deepening US banking crisis, slower growth rates, and eased US labor market conditions. The release of the weekly Initial Jobless Claims for the week ending April 28, which stood at 242K versus the consensus of 240K, and the former release of 229K, has added to the uncertainty.

Investors are awaiting the US NFP data, which is expected to report a lower-than-previous addition of 179K payrolls in April, with steady earnings numbers expected. However, better-than-expected earnings data could renew inflationary pressure fears. Apart from this, any developments on debt ceiling concerns could make the USD Index highly volatile. GOLD technical analysis shows that the precious metal is currently building a base around the demand zone in a narrow range of $2,050.00, with the 10-period Exponential Moving Average (EMA) at $2,047.00 providing support to the Gold bulls after a sharp fall from an all-time high of $2,079.77.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.