Gold (XAU/USD) is maintaining its position within a week-long trading range of approximately $2,630 to $2,670 on Monday. This stability follows the release of unfavorable US employment data, which has been offset by ongoing safe-haven demand.
Following the NFP report, gold prices dipped to a low of about $2,632 on Friday. This drop was driven by the expectation of sustained elevated interest rates, which diminishes the appeal of gold as a non-yielding asset and strengthens the US Dollar (USD), further pressuring the yellow metal, which is primarily traded in USD.
Safe-Haven Demand Provides Support
Despite the pressures, gold is benefiting from persistent safe-haven demand amid escalating tensions in the Middle East. Recent reports indicate that Israeli forces have destroyed a mosque in the southern Lebanese village of Yaroun, as reported by Al Jazeera. Furthermore, markets remain on edge as Israel is anticipated to launch a retaliatory strike against Iran following a rocket attack last week, where Iran fired around 200 missiles in response to the death of Hassan Nasrallah, the leader of the Iran-backed group Hezbollah.
In addition, gold’s attractiveness is bolstered by the prospect of renewed demand from China, following the government’s announcement of an extensive economic stimulus package. As China represents the largest market for gold, the health of its economy is crucial for influencing gold prices.
Moreover, the overall downward trend in global interest rates—despite the recent adjustments in the US—helps maintain gold’s appeal as a portfolio asset, supporting its stability amid current market fluctuations.
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