Gold prices are under slight pressure as China's central bank – the People’s Bank of China (PBoC) - holds off on purchases for the second straight month. This absence of a significant buyer – the PBoC have been a constant buyer of gold over the last 18 months - leaves the precious metal susceptible to profit-taking after last week’s NFP-inspired rally. The precious metal traded at a six-week high last Friday at just under $2,400/oz. but has drifted lower today after the weekend news.
US interest rate cut expectations nudged higher at the end of last week after the latest US Jobs Report suggested a hiring slowdown. While the headline NFP number was slightly higher than expected, the prior month’s revisions, and the increase in the jobless rate to 4.1%, more than outweighed the headline beat. There is now a 74% probability of a 25bp cut at the September 18th FOMC meeting with a further quarter-point cut priced in by the end of the year.
US Dollar Unchanged on Mixed US NFPs, Gold Grabs a Small Bid
Data using Reuters Eikon
Gold remains rangebound and is currently sitting in the middle of a multi-month range. The 20- and 50-day simple moving averages remain supportive, while a clean break above $2,287/oz. would leave range resistance at $2,450/oz. under threat. A break below the two moving averages would leave $2,320/oz. as the next level of interest.
