Posted 7th October 2022

Gold Investors Await Crucial US Jobs Data Hoping Rally Doesn’t Fade

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Gold is still holding above $1,700 an ounce as the markets await crucial US jobs data that will give the latest indication on the health of the world’s largest economy.

This week’s unexpected rally for gold has been driven by expectations that the Federal Reserve may be less aggressive with its future interest rate moves following the publication of a couple of economic indicators that suggested that the US economy is starting to feel the pinch from the dual impact of persistently high inflation accompanied by sizeable interest rate hikes. Therefore today’s release of the September unemployment rate and the non-farm payrolls will provide further clarity on the true state of the US economy.

Yesterday saw a host of senior Fed officials reiterating the need for further interest rate hikes so they will be hoping the jobs picture painted later today gives the US central bank sufficient breathing space to continue their hawkish stance. If this proves to be the case then gold is likely to reverse much of the week’s gains as it would mean further large rate hikes are likely, further reducing the appeal of the non-yield-bearing asset. 

Gold’s main source of support continues to be the ongoing war in Ukraine. While the conflict continues, markets will remain jittery with gold’s value, as a safe-haven asset that has endured through centuries of wars, sought after.

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