Gold price starts a new retracement

Gold Price Falls After NFP and Awaiting CPI

The price of gold has been under pressure since Friday in the face of the strong rebound in bond yields. The ounce of gold fell nearly 1% on Friday following the strong US employment report which came out better than expected. The U.S. economy added more than 500,000 jobs in July when the consensus expected half as many, suggesting that the economy is more resilient than observers expect and therefore paving the way for an ever faster tightening of the Fed.

The likelihood of another 75 basis point rate hike from the Fed at the next meeting in September inevitably jumped after the jobs report, rising from around 30% to nearly 70%. Bond yields naturally followed with the US 2-year yield up 19 basis points to 3.23%, its highest level since mid-June, and the 10-year yield up 16 basis points to stand at 2.84%.

All eyes are now on the July inflation figures released on Wednesday. US inflation above expectations at 8.7% would increase pressure on the Fed and therefore the bond market and gold, and vice versa.

Gold Price Daily Chart – Key Levels


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