Price of Gold Fundamental Daily Forecast – Weakens in Reaction to Solid U.S. Jobs Report

Gold prices are edging lower shortly after the release of the U.S. Non-Farm Payrolls report. The market is trading inside yesterday’s range, which suggests investor indecision and impending volatility as traders digest the news. The market is in a position to finish the week higher after data released earlier in the week raised concerns about a U.S. recession.

At 12:33 GMT, December Comex gold is trading $1506.00, down $7.90 or -0.52%.

On Friday, the Labor Department reported that nonfarm payrolls rose 136,000 in September. This was below the 145,000 estimate.

However, the unemployment rate hit a fresh 50-year low in September at 3.5%, matching a level it last saw in December 1969. The jobless rate fell 0.2 percentage points from its August reading.

Wages also were a disappointment, with average hourly earnings little changed over the month and up just 2.9% for the year, the lowest increase since July 2018.

Other details from the report showed discouraged workers and the underemployed also fell, declining 0.3 percentage points to 6.9%, matching its lowest in nearly 19 years and just off the all-time low of 6.8%.

Helping to drive the price action in gold was a slight in U.S. Treasury yields, increased demand for higher risk assets and steady U.S. Dollar.

The CME FedWatch Tool is placing the probability of a 25-basis point rate cut at the end of October at 79.6%, down from 92.5% prior to the report.

Later today at 18:00 GMT, Federal Reserve Chairman Jerome Powell will give a speech. Traders will be looking for clues as to his feeling about the economy and the potential for another rate cut.