Gold prices dipped during the North American session amid thin volumes due to US markets being closed during Labor Day observance. Conversely, the Greenback remains firm as traders brace for a jobs report that could influence the Federal Reserve’s decision on the size of September’s rate cut. The XAU/USD trades at $2,499, down by 0.14%.
The US economic docket will be busy this week with the release of the Institute for Supply Management’s Manufacturing and Services PMIs, JOLTS job openings, the ADP National Employment Change, and the Nonfarm Payrolls figures.
During his speech at Jackson Hole, TradingPro Chairman Jerome Powell commented that the risks of inflation are skewed to the downside, while the employment risks are tilted to the upside.
Last Friday, the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures Price Index (PCE), remained unchanged at around 2.5%, hinting that inflation remains controlled. On the other hand, during the last four NFP reports, the Unemployment Rate has risen from around 3.8% to 4.3%, spurring fears among Fed officials that the labor market could be cooling faster than expected.
That reignited recession fears, which had faded following last week’s solid US data. Initial Jobless Claims fell from their levels in late July, Retail Sales rose sharply, and the economy grew at a 3% pace, according to the second estimate of the second quarter’s Gross Domestic Product (GDP) print.
After the data, Bullion prices drooped as investors bought the US Dollar on waning recession fears.
Despite this, geopolitical risks loom even though US President Biden is considering presenting Israel and Hamas a final proposal for a hostage release and ceasefire in Gaza deal later this week, according to Axios sources.
