In a significant upswing, the price of gold (XAU/USD) exceeded the $2,100.00 mark on Monday as investors intensified their interest in spot gold bids. The surge in gold prices is attributed to a growing belief among investors that the Federal Reserve (Fed) is likely to implement a rate cut in June. This sentiment gained momentum following last week’s release of US economic data, which exhibited middling to softened figures.
Investors are positioning themselves for potential risk-taking, anticipating a June rate cut from the Fed. The focus of the market has shifted towards this week’s critical US Nonfarm Payrolls (NFP) report scheduled for Friday. Traders are particularly interested in a softer labor figure, which could further fuel expectations of a rate cut. The overall sentiment is aligning with broader market hopes for a weakened US economic outlook, contributing to increased buying activity in XAU/USD.
The upcoming week also features the release of the US ADP Employment Change data for February, serving as a labor data preview ahead of the NFP report. However, the reliability of this preview has been inconsistent in recent history. Additionally, Federal Reserve Chairman Jerome Powell is set to testify before the Financial Services Committee on Wednesday, presenting the Semi-Annual Monetary Policy Report at 15:00 GMT.
The week’s economic calendar kicks off with the ISM Services Purchasing Managers Index for February on Tuesday. Analysts anticipate a slight softening to 53.0 from January’s 53.4, providing early insights into the economic landscape ahead of the more comprehensive NFP report later in the week.
