Gold surged to a fresh all-time high, defying expectations in the wake of a robust March Nonfarm Payrolls report from the United States (US). The precious metal’s rally brushed aside concerns over rising US Treasury yields and a slightly stronger Greenback, maintaining its upward momentum amidst fundamental drivers including the US Dollar, geopolitical tensions, and physical demand.
XAU/USD reached $2,324, having touched $2,330 earlier in Friday’s North American session. Despite the positive momentum in the US Dollar and Treasury yields, gold remained resilient, buoyed by its intrinsic factors and external geopolitical risks.
The latest US Nonfarm Payrolls data for March significantly exceeded expectations, with a notable increase of 303,000 new hires. While this bolstered confidence in the labor market, the Unemployment Rate declined, and Average Hourly Earnings showed mixed results, rising on a monthly basis but declining annually.
Following the release of the strong employment data, market expectations for a Federal Reserve (Fed) rate cut in June decreased further, dropping from approximately 70% a week ago to 53.4%, as indicated by the CME FedWatch Tool.
The sentiments echoed recent statements from Fed Chair Jerome Powell, who emphasized the Fed’s cautious approach towards rate cuts during his Wednesday remarks. This sentiment reverberated throughout the week, with further reinforcement from statements made by various Fed officials on Friday, including Richmond Fed’s Barkin, Dallas Fed’s Logan, and Governor Bowman.
