Gold prices relinquished earlier gains on last Friday following the release of disappointing Nonfarm Payrolls data by the US Bureau of Labor Statistics (BLS), indicating a slowdown in the job market. The precious metal initially surged towards its daily peak of $2,310 but fell short of surpassing the high set on May 2 at $2,326, triggering a retreat to current levels.
At present, XAU/USD hovers around $2,300, showing minimal change with a marginal decline of 0.02%. The optimistic sentiment on Wall Street is denting the safe-haven allure of gold, especially as US Treasury yields decline, with the 10-year benchmark note dropping by seven basis points. Concurrently, US real yields, which tend to move inversely to gold prices, slid by six and a half basis points from 2.219% to 2.146%.
The US economic outlook presents a mixed picture post the NFP report, as demonstrated by the Institute for Supply Management’s (ISM) revelation of a contraction in business activity within the services sector for the first time since December 2022.
In addition to economic data, statements from Federal Reserve (Fed) officials have made waves. Fed Governor Michelle Bowman adopted a hawkish stance during an interview with Bloomberg Television, indicating readiness to raise rates if inflation falters or reverses. Meanwhile, Austan Goolsbee of the Chicago Fed highlighted the solidity of the latest US employment report, emphasizing the current restrictive nature of monetary policy.
The evolving economic landscape, coupled with insights from Fed officials, underscores the nuanced dynamics influencing gold prices amid shifting market sentiments and macroeconomic indicators.
