Weekly Forecast: XAU/USD could break out of range on NFP?
# ****Gold Price
XAUUSD
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Gold has been struggling to make a decisive move following a correction from the $2,000 level. While the technical outlook points to a bullish bias, buyers are likely to remain hesitant in the near term. Market participants are closely watching the US Nonfarm Payrolls (NFP) data, which could trigger the next big action in the XAU/USD pair.
Last week, gold price faced bearish pressure and suffered heavy losses on Monday after First Citizens BancShares Inc announced its purchase of all the loans and deposits of SVB. The news led to a positive tone in the markets, causing global bond yields to gain traction and XAU/USD to drop all the way to $1,950. On Tuesday, the Consumer Confidence Index in the US improved slightly, and the one-year consumer inflation expectation of the survey edged higher, but this data failed to provide a boost to the US dollar.
Wednesday saw Alibaba Group Holdings' plan to split its business into six units and have them listed publicly, allowing risk flows to dominate markets during the first half of the day. However, in the absence of high-impact macroeconomic data releases, gold price fluctuated in a narrow channel and struggled to make a decisive move in either direction. On Thursday, the US Bureau of Economic Analysis (BEA) announced a revised fourth-quarter Gross Domestic Product (GDP) growth down to 2.6%, coupled with a 7,000 increase in the Initial Jobless Claims in the week ending March 25. Despite these disappointing data releases, XAU/USD regained its traction as the US dollar continued to weaken in the risk-positive market atmosphere.
On Friday, mixed PMI readings from China made it difficult for XAU/USD to find direction early on, but the Core Personal Consumption Expenditures (PCE) Price Index's decline to 4.6% on a yearly basis in February from 4.7% in January helped XAU/USD hold its ground ahead of the weekend.
Next week, the US ISM Manufacturing PMI will be watched closely by market participants, especially the Prices Paid component of the survey, which climbed to 51.3 from 44.5 in January, revealing an increase in input inflation. The market is yet to figure out whether the US Federal Reserve will raise its policy rate one more time by 25 basis points (bps) in May. If the PMI survey points to an acceleration in the manufacturing sector's input inflation, hawkish Fed bets could return and help the US dollar find demand, potentially putting XAU/USD under bearish pressure.
ADP's private sector employment report and the ISM Services PMI will be featured in the US economic docket on Wednesday. ADP Employment Change is forecast to decline sharply to 10K in March from 242K in February. A negative print could weigh on the US dollar, causing markets to price in a dismal March jobs report. A noticeable decrease in the Prices Paid sub-index of ISM Services PMI could also hurt the US dollar, and vice versa.
Ahead of the weekend, the US Bureau of Labor Statistics will publish the labor market data for March, which is forecast to show a decline of 8,000 in Nonfarm Payrolls (NFP). Even if the NFP comes in higher than expected, any reading below 50,000 should be seen as a red flag and trigger a leg lower in US yields and the US dollar. On the other hand, an increase of 100K or higher in NFP could weigh on XAU/USD by lifting yields.
Market participants will also continue to pay attention to comments from Fed officials. Although policymakers are unlikely to try to steer the markets in a certain direction before seeing the jobs report and March
XAUUSD
**** Gold has been struggling to make a decisive move following a correction from the $2,000 level. While the technical outlook points to a bullish bias, buyers are likely to remain hesitant in the near term. Market participants are closely watching the US Nonfarm Payrolls (NFP) data, which could trigger the next big action in the XAU/USD pair.
Last week, gold price faced bearish pressure and suffered heavy losses on Monday after First Citizens BancShares Inc announced its purchase of all the loans and deposits of SVB. The news led to a positive tone in the markets, causing global bond yields to gain traction and XAU/USD to drop all the way to $1,950. On Tuesday, the Consumer Confidence Index in the US improved slightly, and the one-year consumer inflation expectation of the survey edged higher, but this data failed to provide a boost to the US dollar.
Wednesday saw Alibaba Group Holdings' plan to split its business into six units and have them listed publicly, allowing risk flows to dominate markets during the first half of the day. However, in the absence of high-impact macroeconomic data releases, gold price fluctuated in a narrow channel and struggled to make a decisive move in either direction. On Thursday, the US Bureau of Economic Analysis (BEA) announced a revised fourth-quarter Gross Domestic Product (GDP) growth down to 2.6%, coupled with a 7,000 increase in the Initial Jobless Claims in the week ending March 25. Despite these disappointing data releases, XAU/USD regained its traction as the US dollar continued to weaken in the risk-positive market atmosphere.
On Friday, mixed PMI readings from China made it difficult for XAU/USD to find direction early on, but the Core Personal Consumption Expenditures (PCE) Price Index's decline to 4.6% on a yearly basis in February from 4.7% in January helped XAU/USD hold its ground ahead of the weekend.
Next week, the US ISM Manufacturing PMI will be watched closely by market participants, especially the Prices Paid component of the survey, which climbed to 51.3 from 44.5 in January, revealing an increase in input inflation. The market is yet to figure out whether the US Federal Reserve will raise its policy rate one more time by 25 basis points (bps) in May. If the PMI survey points to an acceleration in the manufacturing sector's input inflation, hawkish Fed bets could return and help the US dollar find demand, potentially putting XAU/USD under bearish pressure.
ADP's private sector employment report and the ISM Services PMI will be featured in the US economic docket on Wednesday. ADP Employment Change is forecast to decline sharply to 10K in March from 242K in February. A negative print could weigh on the US dollar, causing markets to price in a dismal March jobs report. A noticeable decrease in the Prices Paid sub-index of ISM Services PMI could also hurt the US dollar, and vice versa.
Ahead of the weekend, the US Bureau of Labor Statistics will publish the labor market data for March, which is forecast to show a decline of 8,000 in Nonfarm Payrolls (NFP). Even if the NFP comes in higher than expected, any reading below 50,000 should be seen as a red flag and trigger a leg lower in US yields and the US dollar. On the other hand, an increase of 100K or higher in NFP could weigh on XAU/USD by lifting yields.
Market participants will also continue to pay attention to comments from Fed officials. Although policymakers are unlikely to try to steer the markets in a certain direction before seeing the jobs report and March