Recent US economic reports indicate a cooling economy, notably the Job Openings and Labor Turnover Survey (JOLTS) for April, which showed a significant decrease in job openings to 8.059 million—the lowest in over three years.
This, coupled with a weaker-than-expected ISM Manufacturing PMI, has reinforced expectations for a Fed rate cut in September.
The subdued Treasury yields, with two-year and ten-year notes around 2.9% and 3.1%, respectively, are curbing dollar strength and underpinning gold prices.
Market Sentiment Cautious Ahead of Key Reports
Gold prices experienced a modest increase in Wednesday’s Asian session, maintaining a steady range amidst ongoing speculation about the timing of Fed rate cuts.
The market’s cautious stance is expected to continue until the release of the Nonfarm Payrolls (NFP) on Friday, which might provide more clarity on the US labor market and potentially influence Fed decisions.
Looking Forward: Anticipation for Federal Reserve Meeting
The financial community is closely watching the upcoming Federal Reserve meeting next week, anticipated to leave rates unchanged due to persistent inflation concerns in the US. This event, together with upcoming economic data releases, is poised to play a critical role in determining the near-term trajectory of gold prices.