Will U.S Jobs Data Drive Gold Prices Higher or Lower?

Gold Holds Steady Ahead of U.S. Non-Farm Payrolls Report

Gold prices are currently holding steady in wait-and-see mode as traders turn their attention to this week’s highly anticipated U.S Non-Farm Payrolls report for clues on the precious metals next big move.

There will be a huge focus on Friday’s data, especially as the jobs number could determine whether the Fed cuts by 25 or 50 basis points at their next policy meeting on September 17-18.

Labour market data released on Wednesday showed, U.S job openings fell to the lowest level in more than three years in July – keeping the Federal Reserve on track to lower interest rates later this month.

There were 7.7 million job vacancies in July, according to the labour department’s Job Openings and Labour Turnover Survey. That was down from 7.9 million in June and the lowest total since January 2021.

Job openings have trended downward from their 2022 peak as the labour market has slowed, dropping 13% over the past year. Lay-offs also rose slightly to 1.8 million, the highest level since March 2023, further indicating that demand for workers is slowing.

This is the clearest and strongest indication yet that the pandemic job market is over.

Traders known that the Federal Reserve takes JOLTs data seriously and they will not shrug it off. This now places even greater emphasis on Friday’s Non-Farm Payrolls Report.

Unemployment Surge Spurs Market Panic as Traders Await Key Jobs Data

Last month, a sharp rise in the unemployment rate – triggering the Sahm Rule, a historically accurate recession indicator – fanning fears in global financial markets that the economy may be on the brink of a downturn.

The data spurred a massive market meltdown – that saw more than $3 trillion wiped off the global equity markets in less than 24 hours – as traders ditched riskier assets in favour of safe-havens such as Gold – sending the precious metal skyrocketing above $2,500 an ounce for the first time ever.

There is no denying that traders will once again be on the edge of their seats waiting anxiously to see if the July Non-Farm Payrolls data was just an unexpected blip or the start of a weakening trend in the U.S labour market.

Best-case outcome would be a “Goldilocks” scenario, where the data is – not too hot and not too cold.

However the danger really is bad news. Even if the Fed is prepared to react aggressively, the reality is that policymakers might find themselves already behind the curve. On the flipside, there is also a concern that if the news is too good, the Fed might be reluctant to cut rates as fast as the traders have come to expect.

Regardless of whether the data meets, beats, or misses expectations – the outcome is guaranteed to be a license to print money, which traders will not want to miss out on!