Soft US job data saved gold from further decline on Friday, and the XAU / USD is back above $ 1800.
CPI and Fed Chairman Powell are the key events to be seen next week.
Spot gold prices (XAU / USD) were at the forefront of recent trading following a gloomy US labor market report for January, aided by the weakness of the US dollar; traders may suspect a soft start to the year in the labor market will encourage US monetary policymakers to stay on the gas longer in terms of light economic conditions, an environment that could be favorable for gold (especially if real yields continue to be lower) and inflation expectations rise).
Gold is currently trading in the $ 1810s, having managed to recover the large figure during the European morning and then find it further in the wake of the data. Prices rise by approx. 1% or not less than $ 20 per day. But during the week things were not good; XAU / USD ended the week at around 2% or $ 35, after Monday's session in Asia-Pacific starting at just under $ 1850. Soft American numbers at work seem to have been a lifeline for gold; a strong number would probably have had the precious metals test in November low at $ 1760.
As we look forward to the precious metal, traders should continue to monitor the events in the foreign exchange, stock and bond markets; For most of the week, USD, equities and bond yields rose simultaneously, a bearish combination for gold. If it continues until next week, Friday's rebound could not jump more than a dead cat. US consumer price inflation data for January and a speech by Fed Chairman Jerome Powell next week will be the most important calendar events to keep an eye on.
Downbeat Jobs Report in the United States
In an immediate response to Friday's U.S. labor market report, spot silver saw a strength, although much of it was settled quickly. As a summary; The U.S. economy added 49,000 jobs in January, almost according to consensus expectations according to Reuters, but according to Bloomberg slightly below consensus. However, it was somewhat disappointing that most of these posts added related to public (+ 43 K), not private work (+ 6 K). Surprisingly, unemployment fell from 6.7% to 6.3%, but this was partly due to a decline in the participation rate from 61.5% to 61.4%. U6 under unemployment was 11.1% versus 11.7%.
Meanwhile, average hourly wages continue to grow at a historically high rate, although these figures are distorted by the excessively high level of job losses in lower-paid sectors of the economy (such as hospitality and leisure) that are more seriously affecting the pandemic. and locks. All in all, not a good report, hence the low strength seen in the safe haven of precious metals markets; Weaker numbers are better silver than 1) it pulls some steam out of the US dollar (as Friday apparently did) and 2) it helps keep the Fed policy accommodating longer.
As for the whole picture; Does Friday's labor market report change the outlook for US fiscal or monetary policy? Not really. A soft report will put some pressure on Congress to act, which is undoubtedly positive for taking risks. But they will continue to provide more incentive. The Fed, meanwhile, is far from considering tightening.
XAU/USD key levels
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