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MTrading Team • 2023-06-02

Gold struggles to defend weekly gains ahead of US NFP

Gold struggles to defend weekly gains ahead of US NFP

The market portrays the typical pre-NFP consolidation on early Friday, allowing the Gold and US Dollar to take a breather after a volatile day. Even so, the yellow metal is up for the first weekly gains in four while the greenback eyes snapping a three-week uptrend.

That said, risk-profile remains dicey as optimism from the US debt-ceiling deal’s passage fades amid indecision about the major central bankers’ next moves. Nasdaq marked a 13-month high and allows US stock futures to grind higher while shares in Asia-Pacific trade mixed.

AUDUSD rises the most among the G10 currency pairs whereas EURUSD and GBPUSD remain elusive as traders keenly await the US employment report amid a light calendar. NZDUSD also prints mild gains while USDJPY bucks the trend as it traces the upbeat Treasury bond yields.

Elsewhere, BTCUSD and ETHUSD recover for the first time in five and three days respectively amid a softer US Dollar and hopes that the avoidance of US default may fuel traders’ participation in cryptos.

Following are the latest moves of the key assets:

  • Brent oil extends previous day’s recovery towards $75.30 at the latest.
  • Gold price grinds higher after rising in the last two days, indecisive near $1,977 by the press time.
  • USD Index remains depressed near 103.50 after reversing from 11-week high the previous day.
  • Wall Street closed within green and so did Asia-Pacific shares, as well as the equities in the UK and Europe.
  • BTCUSD and ETHUSD rise nearly 1.0% to around $27,000 and $1,890 at the latest.
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US Dollar retreats amid mixed mood…

USD Index drops for the second consecutive day while extending the previous day’s pullback from a 2.5-month high. In doing so, the greenback justifies the market’s easing hawkish Fed bets and optimism of overcoming the fears of US default.

The same joins mixed US data to underpin the recovery in other riskier assets like AUDUSD, shares and cryptocurrencies. That said, the Gold price grinds higher as traders seek solace in the precious metal amid uncertain markets and likely policy pivot at the Fed.

On a different page, China’s upbeat PMIs allowed additional strength to the AUDUSD and Gold price, not to forget other Antipodeans and Crude Oil, but the USDJPY had to pare weekly losses as yields print corrective bounce while BoJ Governor Ueda defends easy-money policy.

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

NFP, Fed concerns are crucial…

While the Fed hawks have recently stepped back, they’ve not left the arena and hence the US Dollar’s retreat appears elusive unless the US jobs report suggests easing in tight labor markets. Additionally, the final rounds of Federal Reserve officials’ public comments before the restricted two-week period also become the key to observe for clear directions.

May the trading luck be with you!