Gold Price Climbs Above $2,300 Despite Strong US Jobs Data Boosting USD
Gold (XAU/USD) surged to fresh all-time highs above $2,300 early Friday, defying expectations of a decline after the release of a robust US Nonfarm Payrolls (NFP) report. The Bureau of Labor Statistics (BLS) report revealed surprisingly strong labor market conditions in March.
NFP Report: Hiring Strengthens, Wage Growth Cools
US employers added 303K jobs, significantly outpacing the 200K forecast and the revised February figure of 270K. The Unemployment Rate dipped to 3.8%, beating consensus estimates. As anticipated, annual Average Hourly Earnings growth slowed to 4.1%, down from 4.3% previously. Monthly wage growth also met expectations but remains above February's levels.
Robust Labor Market vs. Fed Rate Cut Expectations
A strong labor market is likely to slow progress towards the 2% inflation target, potentially delaying any June rate cuts by the Federal Reserve (Fed). This increases the opportunity cost of holding non-yielding assets such as gold.
The CME FedWatch Tool shows traders now see a 58% probability of a June rate cut, down from previous levels following the strong jobs data.
US Dollar and Yields React
The US Dollar Index (DXY) extended its recovery to 104.50 on robust employment data, while 10-year US Treasury yields climbed to 4.37%, signaling expectations of higher interest rates for longer.
Technical Outlook: Gold Retreats Slightly, Key Support Levels
After hitting the $2,300 milestone, Gold prices experienced a minor pullback. Near-term bullish momentum persists, with all short-to-long-term Exponential Moving Averages (EMAs) trending upwards. Key support lies at the March 21st high of $2,223.
The 14-period Relative Strength Index (RSI) near 80.00 indicates continued bullish strength, though overbought signals are emerging.