Gold price (XAU/USD) remains defensive at $2,007 during the early hours of Good Friday, after falling the most in a fortnight. In addition to the holiday-driven lack of liquidity, the cautious mood ahead of the top-tier United States employment data for March also restricts the XAU/USD moves. It’s worth noting that the fears of recession recently weighed on the Gold price even if the US Dollar struggles to recover, mainly due to the downbeat US statistics.
Gold price snapped a three-day uptrend and marked the biggest daily loss in nearly two weeks as consecutive weakness in the United States data and downbeat US Treasury bond yields triggered fears of a recession in the world’s largest economy.
Talking about the latest US employment data, US Initial Jobless Claims improved to 228K for the week ended on March 31 versus 200K expected and upwardly revised 246K prior. It’s worth noting that the Challenger Job Cuts for the said month rose to 89.703K from 77.77K prior. Previously, US JOLTS Job Openings dropped to the 19-month low in February while the ADP Employment Change for March also disappointed markets with 145K figures. Further, the US ISM Services PMI for March also amplified pessimism as it dropped to 51.2 versus 54.5 expected and 55.1 prior.
Elsewhere, Reuters recently flagged fears of recession by citing the Federal Reserve (Fed) Chairman Jerome Powell’s the preferred bond market indicator’s latest slump. “Research from the Fed has argued that the ‘near-term forward spread’ comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction,” said the news.
Amid these plays, Wall Street licks its wounds while the US 10-year and two-year Treasury bond yields also stay pressured, despite the latest consolidation around 3.30% and 3.83% in that order.
Given the looming fears of recession, Gold traders will have to closely examine the incoming US employment data to trade better.
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