PMI, Labor Market: Key Factors Influencing XAU/USD
The world’s largest Gold consumer, China, is set to unveil the NBS Manufacturing PMI and Non-Manufacturing PMI data early next week. An above 50 reading in Manufacturing PMI could lend XAU/USD a strong kickoff for the week.
The spotlight will then shift to the U.S. on Tuesday with the release of the ISM Manufacturing PMI and JOLTS Job Openings data. With a record eight consecutive months of sub-50 ISM Manufacturing PMI readings, the persistence of economic contraction in the manufacturing sector would be less than surprising unless a severe drop toward 40 occurs.
In Powell's statement, he emphasized an ongoing discrepancy between labor demand and supply. A JOLTS data reading nearing 10 million may confirm a strained labor market, promoting hawkish Fed projections and potentially instigating bearish pressure on XAU/USD.
Mid-week will see the release of the ADP private sector employment report followed by the ISM Services PMI data on Thursday. Closing the week, the US Bureau of Labor Statistics is due to release the July jobs report on Friday. Nonfarm Payrolls (NFP) is expected to exhibit a rise of 184,000 in July, compared to the 209,000 increase in June. A figure around 200,000 could motivate the Fed towards additional policy tightening, without excessive concerns about a significant rise in the Unemployment Rate. A below 150,000 NFP reading might, however, engender dovish Fed projections, dragging down yields and allowing the Gold price to surge before the weekend.
In conclusion, XAU/USD encounters bidirectional risk in the short run. U.S. data deterioration could rekindle the possibility of the Fed maintaining its current policy rate, propelling the Gold price upwards. Conversely, if the U.S. economy demonstrates resilience with tight labor market conditions, there is a high likelihood that the market will anticipate an additional rate hike later this year, keeping XAU/USD under bearish pressure.
The spotlight will then shift to the U.S. on Tuesday with the release of the ISM Manufacturing PMI and JOLTS Job Openings data. With a record eight consecutive months of sub-50 ISM Manufacturing PMI readings, the persistence of economic contraction in the manufacturing sector would be less than surprising unless a severe drop toward 40 occurs.
In Powell's statement, he emphasized an ongoing discrepancy between labor demand and supply. A JOLTS data reading nearing 10 million may confirm a strained labor market, promoting hawkish Fed projections and potentially instigating bearish pressure on XAU/USD.
Mid-week will see the release of the ADP private sector employment report followed by the ISM Services PMI data on Thursday. Closing the week, the US Bureau of Labor Statistics is due to release the July jobs report on Friday. Nonfarm Payrolls (NFP) is expected to exhibit a rise of 184,000 in July, compared to the 209,000 increase in June. A figure around 200,000 could motivate the Fed towards additional policy tightening, without excessive concerns about a significant rise in the Unemployment Rate. A below 150,000 NFP reading might, however, engender dovish Fed projections, dragging down yields and allowing the Gold price to surge before the weekend.
In conclusion, XAU/USD encounters bidirectional risk in the short run. U.S. data deterioration could rekindle the possibility of the Fed maintaining its current policy rate, propelling the Gold price upwards. Conversely, if the U.S. economy demonstrates resilience with tight labor market conditions, there is a high likelihood that the market will anticipate an additional rate hike later this year, keeping XAU/USD under bearish pressure.
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