Gold prices rocketed over 2 percent on Thursday, surging above $4,100 after weaker than expected US jobs data slashed expectations for Federal Reserve interest rate hikes. The precious metal jumped from session lows of $4,032 to trade at $4,111 as the US Dollar and Treasury yields tumbled in response to disappointing Non-Farm Payrolls figures.
The softer employment numbers have effectively taken near-term Fed tightening off the table, triggering a flight from the greenback and fixed income markets into safe haven assets. Gold benefited immediately as traders repositioned portfolios based on reduced hawkish monetary policy expectations from the central bank.
Dollar weakness combined with lower real yields creates textbook conditions for gold appreciation, and markets are pricing in an extended pause or potential dovish pivot from policymakers. Traders across forex and commodities desks are adjusting positions as the macro outlook shifts.
FXnCO Insight
Monitor Federal Reserve commentary closely over coming sessions, as any pushback against dovish repricing could trigger sharp gold profit-taking and Dollar recovery trades.
Source: FXStreet