Gold price (XAU/USD) recovers from a two-day and climbs above $2,400 in Thursday’s New York session. The precious metal continues to hold ground due to expectations that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.
Meanwhile, the US Dollar (USD) and bond yields also recovered strongly after the release of the lower-than-expected United States (US) Initial Jobless Claims for the week ending August 2. The US Department of Labor reported that individuals claiming jobless benefits for the first time came in lower at 233K, lower than estimates of 240K and the prior release of 249K.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to near three-day high of 103.40. 10-year US Treasury yields bounce back strongly to near 4%. Historically, higher yields on interest-bearing assets bode poorly for non-yielding assets, such as Gold, by increasing the opportunity cost of investment in them. But the Gold price climbs above $2,400 due to firm speculation that the Fed will start reducing interest rates in September.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.18% | 0.08% | 0.26% | -0.06% | -0.56% | 0.12% | 0.09% | |
EUR | -0.18% | -0.09% | 0.10% | -0.26% | -0.74% | -0.07% | -0.12% | |
GBP | -0.08% | 0.09% | 0.19% | -0.18% | -0.66% | -0.00% | -0.02% | |
JPY | -0.26% | -0.10% | -0.19% | -0.36% | -0.86% | -0.21% | -0.24% | |
CAD | 0.06% | 0.26% | 0.18% | 0.36% | -0.49% | 0.18% | 0.15% | |
AUD | 0.56% | 0.74% | 0.66% | 0.86% | 0.49% | 0.67% | 0.64% | |
NZD | -0.12% | 0.07% | 0.00% | 0.21% | -0.18% | -0.67% | -0.04% | |
CHF | -0.09% | 0.12% | 0.02% | 0.24% | -0.15% | -0.64% | 0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Gold price trades in a channel formation on a daily timeframe, which is slightly rising but broadly exhibited a sideways performance for more than three months. The 50-day Exponential Moving Average (EMA) near $2,370 continues to provide support to the Gold price bulls.
The 14-day Relative Strength Index (RSI) oscillates within the 40.00-60.00 range, suggesting indecisiveness among market participants.
A fresh upside would appear if the Gold price breaks above its all-time high of $2,483.75, which will send it into unchartered territory.
On the downside, the upward-sloping trendline at $2,225, plotted from the October 6 low near $1,810.50, will be a major support in the longer term.
The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. A larger-than-expected number indicates weakness in the US labor market, reflects negatively on the US economy, and is negative for the US Dollar (USD). On the other hand, a decreasing number should be taken as bullish for the USD.
Read more.Last release: Thu Aug 08, 2024 12:30
Frequency: Weekly
Actual: 233K
Consensus: 240K
Previous: 249K
Source: US Department of Labor
Every Thursday, the US Department of Labor publishes the number of previous week’s initial claims for unemployment benefits in the US. Since this reading could be highly volatile, investors may pay closer attention to the four-week average. A downtrend is seen as a sign of an improving labour market and could have a positive impact on the USD’s performance against its rivals and vice versa.
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