Gold price parred some of the week’s losses even as it records its third straight week in red. The easing of the US dollar rallying boosted the precious metal. Even so, a strong labor market continues to weigh on its prices as traders ponder on the possibility of another super-sized interest rate hike by the Fed.
US jobs data
Data released by the US Labor Department on Friday showed that the economy added 315,000 jobs in the just concluded month of August. The published figure exceeded analysts’ forecast of 300,000. Even so, it is still significantly lower than July’s revised figure of 526,000. At the same time, the unemployment rate rose from the previous month’s 3.5% to 3.7%.
Indeed, the US jobs report was a highly anticipated event as traders awaited cues on the Fed’s move during its meeting later in the month. As the central bank strives to deal with the highest inflation in four decades, the labor market remains stronger than it deems fit. In fact, during his statement at the Jackson Hole gathering a week ago, Jerome Powell noted that it is “clearly out of balance, with demand for workers substantially exceeding the supply of available workers.”
While the jobs report offered some relief to gold price, it still points to a strong labor market. This supports the Fed’s ultra hawkish stance; an aspect that will continue to weigh on the non-yielding bullion into the new week.
Besides, the coming week will be rather light on the influential economic events. As such, the US dollar and overall risk sentiment will be crucial drivers of gold price. As such, range-bound trading is likely.
Gold price prediction
Gold price some of the week’s losses on Friday, even as it recorded its third straight week of losses. As shown on the daily chart, the precious metal remains below the 25 and 50-day exponential moving averages. A look at both the fundamental and technical indicators signals that it will likely remain under pressure in the short term despite probable gains into the ensuing sessions.
In particular, I expect gold price to continue trading within the range of 1,725.43 and 1,695.90 in early next week. Even with the possible rebound past the range’s upper border, the critical level of 1,750 will remain an evasive one in the short term. On the lower side, a reversal of Friday’s gains may place the support zone at Thursday’s low of 1,688.96.