Gold Shows Signs of Recovery
On Thursday today, gold is seen showing signs of recovery despite the economic uncertainty.
The spot price of gold has increased by 0.3%, reaching $1,826.74 per ounce. On the other hand, the trading price of United States (US) gold futures also experienced a similar increase, closing the session at $1,840.90.
Economic Indicators
Economic data currently plays a major role in influencing the gold market. At present, attention is focused entirely on the NFP report scheduled for this Friday.
This report is critical because it will influence the decision regarding interest rate hikes by the Federal Reserve (Fed). The market now estimates that interest rates are likely to rise by another 24% or 25 basis points this year.
In addition, there are other factors that also affect the gold market, including the US Consumer Price Index (CPI) data that will be released next week.
Both of these data sets have the potential to be drivers of gold prices rising or pushing them lower, depending on the results that will be obtained from the data.
Job Market Indicators
The market now expects that there is a possible increase of 170,000 jobs in the NFP report for September.
This figure was slightly lower than the increase of 187,000 jobs last August.
In a report released on Wednesday, ADP noted that most of the job growth has occurred in the services sector, although the rate of overall job growth was less than expected.
The fall in this data may indicate a potential downside to the Fed's interest rate hike decision. However, it is still within early expectations, and the market will be closely watching the upcoming jobs numbers to get a clearer picture of the direction the Fed's monetary policy may take.
Gold Price "Downtrend", But There Is a Possibility of "Correction"
The price of gold now shows a "predominant" decline, even though currently gold is seen in an "oversold" status. This situation may lead to a correction phase.
Therefore, there is an expectation that the price will break through the $1,830 price level, with the possibility of reaching the next price level which is $1,860.
However, it should be noted that this scenario does not occur if there is a decline below the $1,810 price level, which may trigger further declines in gold prices, with the potential to reach $1,800.
