Don’t waste your time – keep track of how NFP affects the US dollar!
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Personal areaDuring this week gold has been consolidating in the $1807-$1820 range waiting for the US jobs data announcement. After the past release on August 6, gold fell by almost 6%.
Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but the Fed will remain cautious in its decision to raise interest rates.
The labor market is one of the main indicators of the US economic health, which recovery can push the Federal Reserve to start pandemic stimulus tapering and interest rates increasing.
While gold is considered a hedge against inflation and currency debasement, caused by massive stimulus measures, higher interest rates can weaken investors’ interest in gold.
4H Chart
Gold did not show an expected response to the dovish Powell’s speech. It means markets recognize that the direction for policy is now starting to wind back stimulus. In this case, any hawkish statement can weaken gold and sent it down to $1700 in a couple of hours. In this case, it looks risky to open any trades before the jobs data announcement.
