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Gold (XAU) Daily Forecast: U.S. Jobs Data Fuels Rise Above $2300

Early Monday in Europe, the price of Gold (XAU/USD) rebounded, ending a two-day slide, spurred by unexpectedly weak U.S. employment data.

Gold Price Chart - Source: Tradingview

This development has heightened speculation that the Federal Reserve may lower interest rates in September, which weakened the U.S. dollar and, in turn, enhanced gold’s attractiveness as it is priced in dollars.

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The potential for lower rates could decrease the cost of holding gold, thereby increasing its desirability. April’s U.S. Nonfarm Payrolls grew by only 175,000—far less than the expected 243,000 and significantly lower than March’s revised 315,000.

This underperformance is feeding into a softer stance expected from the Fed. Moreover, the U.S. Unemployment Rate has inched up to 3.9%, and the growth in Average Hourly Earnings has slowed, suggesting less wage pressure, which could also influence the Fed’s monetary policy.

Fed officials like Thomas Barkin and John Williams are due to speak soon, and their comments are keenly awaited by the gold trading community for additional guidance. Gold prices may react sharply to any dovish signals which would likely support a continued price increase.

Meanwhile, the backdrop of decreasing geopolitical tensions in the Middle East and the latest U.S. economic indicators, such as the ISM Services PMI’s dip into contractionary territory, will continue to be significant factors driving gold market dynamics this week.

Gold Price Chart - Source: Tradingview

As gold currently trades near its pivot point at $2309.65, its next movements will be pivotal. Resistance levels at $2328.74, $2351.65, and $2378.36 loom overhead, while supports at $2282.52, $2254.51, and $2230.01 provide downside buffers.

With nearly a 90% probability of a rate cut in September factored in the post-employment report, the stage is set for an intriguing week in the gold markets.

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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.
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