“Gold Prices Fall 1.5% After US Labor Department Announcement, Employment Data and Inflation Concerns”

Investing.com – The US Labor Department announced April, prompting Fed members and inflation frontrunners to tighten their belts in preparation for a new campaign against stubborn inflation.

What has changed yet?

The market responded accordingly to concerns that the Fed may not stop or start cutting frl in June, triggering a bullion sell-off and a drop from the previous session’s record high of over $2,080 to less than 2000 American.

Gold prices now

It is now recording $2,026.65 an ounce, down by 1.42%, while spot spot contracts have now fallen by 1.53%, to $2,018.82.

Employment data

The Ministry of Labor recorded the addition of 253,000 new jobs, 40% more than expected. However, the Ministry made a negative revision of the previous data for the month of March, by reducing it by 37%, to become 165,000 new jobs instead of 263 as mentioned above.

However, the employment data and the decrease in the unemployment rate to 3.4% from 3.5% for the month of March, and the increase in average wages on an annual and monthly basis is what weakened the expectations of a rate cut during the year, especially after the focus of the Federal Reserve Chairman, Jerome Powell, in his press conference that the decisions of the Council will be driven with data.

Inflation is not the only fear

Aside from inflation, the markets are also concerned about a resurgence this week of the US banking crisis that erupted in March. In addition, there were concerns about a possible US debt default, the first and weakest readings for Factory Orders and Durable Goods.

“After finally hitting a record high, gold is under pressure after a hot NFP report drove back bets from the Fed on a rate cut,” said Ed Moya, an analyst at online trading platform Onada, referring to April’s non-farm payrolls. referring to the April non-farm payroll. “If banking concerns continue to ease and the economy remains resilient, some policymakers may wish to resume tightening.”

Despite this, gold “still has a good chance of getting back into a record mood,” Moya said, noting that banking concerns weren’t about to go away anytime soon given the exposure of regional banks to commercial mortgages — and the metal’s position. Yellow as a safe haven against these fears.

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Technical expectations for gold..the return is coming

“Regulators are scrambling and don’t have a clear plan to tackle the regional banking crisis,” Moya said, adding that asking big banks to provide funds to refill the deposit insurance fund hole left by failing small banks was “just another scope-aid solution.”

Also technically, gold was poised for a bounce after Friday’s stumble, said Sunil Kumar Dixit, chief strategist at SKCharting.com. Dixit. “The current levels can attract buyers again to resume the upside move, targeting a retest of $2,048-$2,060 initially, then $2,076 later.”