Gold prices have retraced, forming an inverted 'V' shape and falling below 1935.
On Friday, September 1, New York markets saw stocks rise as traders bet that a rise in the US unemployment rate could prevent the Federal Reserve from tightening policy. Spot gold prices surged and then fell back, rising $7 after the non-farm payroll data was released before giving up gains and falling. As of press time, spot gold was trading at $1939.47 an ounce, while the Dow Jones Industrial Average was up 0.55%. The S&P 500 rose 0.42%, and the Nasdaq Composite rose 0.23%. The latest US non-farm employment report showed the unemployment rate rising to 3.8% in August, a more than one-year high. Economists had previously expected the rate to remain at 3.5%. Another sign of a slowing economy and easing price pressures was that average hourly earnings rose 4.29% year-on-year, below the 4.4% increase expected by economists surveyed by Dow Jones. August job growth was faster than expected, with 187,000 jobs added. However, the initially reported job numbers for June and July were revised down by a total of 110,000. "We're seeing the soft landing the market has been looking for," said Ed Yardeni, president of Yardeni Research. "The market reacted as everyone expected, rising on news of a slowing economy, which is good news." After the report, US Treasury yields fell as investors increased their bets that the Fed would keep interest rates at current levels. The 2-year Treasury yield fell 7 basis points to 4.79%, and the benchmark 10-year Treasury yield fell 2 basis points to 4.075%. After the news, the CME Group's FedWatch tool showed traders had priced in a 91% probability that the Fed would keep interest rates at current levels at its policy meeting later this month. Gold prices strengthened and then fell back on Friday, rising above 1950 after the non-farm payroll data was released, for the first time since August 2. "A significant amount of data suggests that the world's largest economy may be slowing, and investors are now anticipating when the Fed will cut rates, which is boosting gold prices," said Rupert Rowling, market analyst at Kinesis Money, in a report. It is worth noting that the US August ISM Manufacturing PMI data showed the economy is moving away from recession. Macro strategist Cameron Crise said the ISM index rebounded slightly more than expected, rising to 47.6, above the market consensus of 47. Major sub-indexes remained below 50, with new orders falling slightly from 47.3 to 46.8. That being said, the employment and prices paid indexes both rose. Crise noted that interestingly, the difference between new orders and inventories (2.8) is currently at its highest level since February last year. This number typically falls sharply before a recession as demand drops significantly and businesses accumulate unnecessary inventory. This is an argument against an impending recession.
Time:
2023-09-04 08:26
On Friday, September 1st, New York markets saw stocks rise midday as traders bet that a rise in the US unemployment rate could deter the Federal Reserve from tightening policy. Spot gold prices surged and then fell back, rising $7 after the non-farm payroll data was released before giving up those gains and falling. At the time of writing, spot gold was trading at $1939.47 per ounce, while the Dow Jones Industrial Average was up 0.55%. The S&P 500 rose 0.42%, and the Nasdaq Composite rose 0.23%.
The latest US non-farm employment report showed the unemployment rate rising to 3.8% in August, a more than one-year high. Economists had previously expected the rate to remain at 3.5%. Another sign of a slowing economy and easing price pressures was that average hourly earnings rose 4.29% year-on-year, below the 4.4% increase forecast by economists surveyed by Dow Jones.
August job growth was faster than expected, adding 187,000 jobs. However, the initially reported job numbers for June and July were revised down by a total of 110,000.
“We’re seeing the soft landing the market has been looking for,” said Ed Yardeni, president of Yardeni Research. “The market reacted exactly as everyone expected, rising on news of a slowing economy, which is good news.”
Following the report, US Treasury yields fell as investors increased their bets that the Federal Reserve would keep interest rates at their current levels. The 2-year Treasury yield fell 7 basis points to 4.79%, and the benchmark 10-year Treasury yield fell 2 basis points to 4.075%.
After the news, the CME Group's FedWatch tool showed traders had priced in a 91% probability that the Fed would keep interest rates at their current levels at its policy meeting later this month.
Gold prices strengthened and then fell back on Friday, with spot gold briefly exceeding 1950 after the non-farm payroll data release, its highest since August 2nd.
“A significant amount of data suggests that the world’s largest economy may be slowing, and investors are now anticipating when the Fed will cut rates, which is boosting gold prices,” said Rupert Rowling, market analyst at Kinesis Money, in a report.
It is noteworthy that the US August ISM Manufacturing PMI data showed the economy moving away from recession.
Macro strategist Cameron Crise said the ISM index rebounded slightly more than expected, rising to 47.6, above the market consensus of 47. All major sub-indexes remained below 50, with new orders falling slightly from 47.3 to 46.8. That being said, the employment and prices paid indexes both rose.
Crise noted that interestingly, the new orders-to-inventories ratio (2.8) is currently at its highest level since February of last year. This number typically falls sharply before a recession as demand drops significantly and businesses accumulate unnecessary inventory. This is an argument against an impending recession.
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