- Gold futures remained flat at the end of the trading week and settled above the $2,300 level per ounce.
- According to gold trading platforms, the yellow metal tried to find support against the backdrop of a weaker US jobs report that fueled expectations of an earlier-than-expected rate cut.
But with investor confidence that lower interest rates will happen in September, can gold prices rise this week?
In last Friday's session, gold prices rose to $2,320 an ounce before settling around $2,300 an ounce at the start of trading this quiet week. According to the trades, gold prices fell 1.7% last week, but remained up 11.5% since the beginning of 2024 to date.
In the same performance, silver prices, the sister commodity to gold, failed to fall below the level of $27 per ounce. In general, the price of the white metal incurred a weekly loss of approximately 2%. However, silver prices are up 11.2% year to date.
According to global trading platforms, financial markets rose at the end of the trading week after a weaker-than-expected US jobs report for April. According to the Bureau of Labor Statistics (BLS), the US economy added 175,000 jobs in April, down from the revised upwardly revised 315,000 in March. This was below the consensus estimate of 243,000. Also, the unemployment rate rose to 3.9%, up from 3.8% and above market expectations of 3.8%.
Meanwhile, average hourly earnings rose at a slower-than-expected pace of 0.2%, down from 0.3%. On an annual basis, average hourly earnings fell to 3.9% last month, below market expectations of 4%. Moreover, the labor force participation rate remained unchanged at 62.7%, in line with market expectations. Average weekly hours worked fell to 34.3 from 34.4. The under-6 unemployment rate rose from 7.3% to 7.4%.
Additional data points to a slowing economic landscape. The ISM Manufacturing PMI fell to 49.4 from an opening of 51.4 in April. This came in much lower than 52.0. Overall, with the labor market slowing and the economy easing, investors were upbeat on Friday and expecting the US Federal Reserve to activate its first rate cut in September. The US Treasury market was mostly red across the board, with the 10-year yield falling to 4.504%. The 2-year yield fell 6.7 basis points to 4.81%, while the 30-year yield fell 5 basis points to 4.668%. Furthermore, another factor affecting the gold market, the US dollar index (DXY), a measure of the US currency against a basket of other major currencies, fell to 105.05 from an opening of 105.31. Overall, the index lost 0.8% weekly and narrowed its year-to-date gains to 3.67%.
Gold is sensitive to interest rate fluctuations as it affects the opportunity cost of holding non-yielding bullion. Consequently, a weaker dollar is beneficial for dollar-priced commodities as it makes them cheaper to buy for foreign investors.
Gold Price Forecast and Analysis Today:
According to the performance on the daily chart, the price of gold still tends to decline. Stability below the level of $2300 per ounce will motivate the bears to move further downward. The general trend may be broken if the gold price moves further down towards the support levels of $2260 and $2210 per ounce, respectively. On the other hand, the move above the resistance at $2,355 per ounce will be important for bulls to advance further upward. Therefore, the psychological resistance at $2,400 will be an upcoming target, especially if global geopolitical tensions increase again.
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