Key points:
- Gold grinds near $2,330 per ounce.
- May’s NFP data expected Friday.
- What’s gold’s role this week?
Choppy trading is best gold can go right now as focus turns to May’s nonfarm payrolls.
- Gold prices
XAUUSD were floating sideways near $2,330 per ounce with traders and investors shifting their gaze toward a key economic report out of the US. Later this week — on Friday — the nonfarm payrolls report for May will shed light on the possible next steps for the Federal Reserve. The report, commonly known as jobs data, will show how many Americans joined the workforce in the past month. - Why is that figure important? The jobs data is a strong indicator of the health of the US economy. The fewer jobs created, the more defensive employers are in their spending, hiring, and expanding. And vice versa — more jobs are a signal of a heating economy, and that’s not something the Fed wants right now. Instead, central bankers are expecting a cooler number around the vicinity of 180,000, in the ballpark of April’s 175,000 new jobs.
- Where is gold in all that? Gold may react positively to data showing a weaker jobs market (do your own research, though), because the Fed might speed up its interest rate cuts. And rate cuts mean that borrowing costs will get slashed, which may drive investors into bullion as a non-yielding yet safe-haven asset during times of lower interest rates.