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MTrading Team • 2023-08-04

Gold remains depressed as US Dollar stabilizes, yields grind higher ahead of US employment data

Gold remains depressed as US Dollar stabilizes, yields grind higher ahead of US employment data

Markets are following the usual pattern of being sluggish ahead of the all-important US Nonfarm Payrolls (NFP) on early Friday, allowing traders to pare some of the previous moves. However, the original trend favoring the US Dollar amid the risk-off mood remains intact despite lacking momentum.

With this, the Gold Price stays pressured while declining for the fourth consecutive day while Crude Oil defends the previous day’s recovery ahead of the OPEC+ meeting.

Elsewhere, EURUSD, GBPUSD and USDJPY remain mostly unchanged whereas USDCHF rises the most. Additionally, AUDUSD manages to cheer the upbeat RBA Monetary Policy Statement amid the US Dollar’s hesitance in rising, as well as due to cautious optimism.

It’s worth observing that the US Treasury bond yields edge higher around the multi-day top registered the previous day but stock futures and the Asia-Pacific trade mixed of late.

That said, BTCUSD lacks clear direction but ETHUSD prints a three-day losing streak despite positing minor losses of late.

Following are the latest moves of the key assets:

  • Brent oil extends the previous day’s recovery, up 0.22% near $85.50 by the press time.
  • Gold price prints four-day losing streak near $1,933, mildly offered near the three-week low marked the previous day.
  • USD Index remains indecisive around 102.50 after reversing from one-month high on Thursday.
  • Wall Street benchmarks closed with minor losses but the stocks in the Asia-Pacific zone edge higher. On the same line, equities in Europe and UK also print minor gains as we write.
  • BTCUSD and ETHUSD print mild losses to $29,200 and $1,830 of late.
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Dicey markets fail to stop Gold sellers

A lack of major data/events joined the market’s indecision between the receding fears of higher rates and economic slowdown fears signaled by the Treasury bond yields to amplify the pre-NFP trading lull on early Friday. Even so, the hawkish RBA statement joins China's stimulus to help AUDUSD pare weekly losses while other Antipodeans also edge higher despite the US Dollar’s inaction.

Gold Price bears the burden of looming economic fears surrounding Asian nations, the biggest XAUUSD customers, whereas Oil price edges higher as markets expect OPEC to defend production cuts. It should be observed that the equities aren’t interesting after an upbeat performance in July while firmer prints of Germany Factory Orders fail to impress the EURUSD buyers.

Talking about the cryptos, fears that Ethereum won’t be able to cheer the flood of ETF registrations amid a lack of real spot action and looming regulations weigh on the ETHUSD price. On the other hand, BTCUSD traders take a breather as traders seek more clues for clear directions amid industry competition for Bitcoin ETFs and likely harsh regulations from US SEC.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

US, Canada job reports are the key

Although the Eurozone Retail Sales and second-tier activity data from the UK will offer intermediate entertainment to the traders, July’s employment numbers from the US and Canada become crucial to watch. The main reason behind the same is the latest concerns that the Fed and BoC run out of fuel to defend the policy hawks. Should these numbers fail to back the respective central banks’ “higher for longer” case for the rates, the USD and the CAD may witness further downside. However, the firmer Oil price, Canada’s main export item, can fade the effects of downbeat Canadian employment data on the Loonie.

May the trading luck be with you!