Gold price edged lower on Friday; recording losses for the third consecutive session. As a reaction to the higher-than-expected US nonfarm payrolls, the precious metal hit an intraday high of $1,692.33; retesting a level last recorded at the beginning of the week.
Even so, the bullion is set to record the second week in the green. Even with the volatility, it has been on a rebound for over one week now after hitting an over two-year low at $1,615.11.
What’s driving the market?
US jobs data
The highly anticipated US nonfarm payrolls came in higher-than-expected; an aspect that explains the decline recorded in gold price on Friday. Data released by the country’s Labor Department showed that nonfarm payrolls rose by 263,000 jobs in September. The figure came in higher than the forecast 250,000 but remained below the prior month’s 315,000.
At the same time, the unemployment rate in the US dropped from 3.7% to 3.5%. Economists had expected it to remain unchanged from August’s level.
What the report means for gold price
The higher-than-expected US job numbers cemented bets that the Federal Reserve will persist with its aggressive policy tightening in the coming months. Indeed, the environment of high interest rates has been weighing on gold price in recent months while boosting Treasury yields and the US dollar.
Where to next?
In the coming week, $1,690 – the current support level – will be worth watching. However, as the market digests the US jobs data, the bears may have an opportunity to retest the lower zone of $1,660. On the upside, $1,729.80 will likely remain a crucial resistance level amid the environment of high interest rates.
On the data front, US inflation data will be a key driver of gold price. Besides, Fed meeting minutes are also scheduled for release in the course of the coming week.