GOLD decreased slightly after the US employment report

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XAUUSD fell in the trading session on Friday (October 4), when traders almost stopped betting on the possibility of the Federal Reserve (Fed) reducing interest rates by 0.5 percentage points in next meeting. Interest rate expectations moved strongly after the market received the US September employment report much better than expected.

At closing, the spot price of gold in the New York market decreased by 2.2 USD/oz compared to the closing level of the previous session, equivalent to a decrease of 0.08%, to 2,654.3 USD/oz - according to data from the exchange. Kitco translation. For the whole week, spot gold price decreased by 4.6 USD/oz, equivalent to a decrease of 0.17%.

A report from the US Department of Labor shows that the number of new jobs created in the non-agricultural sector in September reached 254,000 jobs, far exceeding the forecast of 150,000 new jobs that economists made in a survey by Dow Jones news agency. The unemployment rate decreased slightly to 4.1% instead of remaining at 4.2% as forecast.

The USD increased sharply after the above report was published, and bets on a 0.5 percentage point interest rate cut at the Fed's November meeting almost disappeared. All of these movements put downward pressure on the price of gold - the asset is priced in USD and does not carry interest.

The Dollar Index, which measures the strength of the USD compared to six other major currencies, increased nearly 0.5%, closing Friday at 102.49 points, the highest since mid-August.

This week, the Dollar Index increased by 2.1% due to a sharp drop in expectations for a 0.5 percentage point interest rate cut by the Fed, not to mention the need to hedge against Middle East geopolitical risks, which encouraged investors to buy the currency. greenbacks and US treasury bonds. In the past month, the index has increased nearly 1.3% - according to data from MarketWatch.

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Ghi chú

In the context of rising global debt and instability, gold remains the only asset that does not carry third-party risks and does not come with geopolitical risks. These are the two main reasons why major central banks continuously hoard gold.

The strong payroll report seems to have made investors certain of a cut of 25 basis points (0.25%) instead of 50 basis points. Prices have declined in the short term, but optimism remains for gold.

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Goldman Sachs also maintains its forecast that the Fed will reduce interest rates gradually, with each reduction of 25bps, to bring interest rates to 3.25-3.5% by June 2025. They emphasized that there is no clear reason for job growth to slow given that employment is high and the US economy is still growing strongly.

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Gold prices fell more than 200 pips to below 2,640 USD/oz in the context that bets on the possibility of the Fed cutting interest rates by 50 bps in November were almost eliminated. The USD consolidated last week's strong gains and put pressure on gold prices as investors are closely monitoring the geopolitical situation.

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Gold's "pause" last week was mainly due to the strong increase in the USD, benefiting from safe-haven capital flows after Iran launched more than 180 ballistic missiles toward Israel and the US jobs report exceeded expectations. on Friday, when 254,000 new jobs were created in September. Gold and the USD often have a negative correlation, meaning a stronger USD often puts downward pressure on gold prices and vice versa. However, despite the recent USD rally, gold still maintains its position.

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Ghi chú

Gold price is still maintaining around 2,640 USD/oz. Expectations that the Fed will cut interest rates by 50 basis points in November seem to have reached 0%, creating a drag on the precious metal's rise. However, geopolitical risks and mild USD weakness will limit the downside for XAU/USD.

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On the international market, the gold price today reached 2,609 USD/ounce, down 33 USD. The sudden decline in world gold prices is said to be due to overbought conditions. Although there may be room to increase in the near future, precious metals are "running out of buyers".