Gold price turns sideways near all-time highs as focus shifts to the US NFP report.
The US Dollar rises as Fed Kashkari said he sees no rate cuts if inflation remains stubborn.
Escalating Middle East tensions keep safe-haven bids strong.
Gold price’s (XAU/USD) rally pauses after refreshing all-time highs near $2,305 amid uncertainty ahead of the release of the United States Nonfarm Payrolls (NFP) data for March. The labor market data is expected to influence market expectations for the Federal Reserve (Fed) rate cuts, which financial markets are currently anticipating for June.
The CME FedWatch Tool shows that traders are pricing in a 61% chance that the Fed will trim interest rates in June, an inch higher from 60% a week ago. Traders bets for Fed rate cuts remain broadly unchanged as surprisingly weak US Services PMI for March offset the negative impact of hawkish commentary from a slew of Fed policymakers. Meanwhile, 10-year US Treasury yields are up at 4.34%.
Surprisingly, the Services PMI fell to 51.4 in March, from expectations of 52.7, and the former reading was 52.6.
Meanwhile, the near-term appeal of Gold remains strong due to escalating Middle East tensions. Air strikes from Israeli forces on the Iranian embassy in Damascus, situated near Syria’s capital, have deepened fears of Iran’s participation in the Israel-Palestine war. Rising geopolitical tensions lead investors towards safe-haven assets such as Gold.
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