The price of gold fell by about 0.5% at the beginning of the session, but then regained all lost positions, which was facilitated by the weakening of the US currency.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.31% to 105.61.
Market participants are also preparing for the Fed meeting and the publication of key data on the US labor market, which will help clarify the prospects for the Fed's monetary policy. Experts warn that if Fed Chairman Powell prefers a ”hawkish" attitude this week, and employment data exceed expectations, gold could be facing a test of some key support levels on the downside. In the first quarter of 2024, the economy created an average of 276 thousand jobs per month, compared with 212 thousand per month in the fourth quarter of last year. Thanks to steady recruitment, few people have been left without a job. The unemployment rate has been below 4.0% for 26 consecutive months. This is more than the total number of months when the unemployment rate was below 4% in the previous 50 years combined. Despite the obvious strength of the labor market, there is a downward trend in the number of job ads, fewer and fewer small businesses want to hire employees, and news about layoffs continues to appear. Despite these obstacles, sustainable spending and economic growth should contribute to further job growth. According to forecasts, the unemployment rate did not change in April (3.8%), and the number of employed increased by 210 thousand after an increase of 303 thousand in March.
Currently, investors are counting on one Fed rate cut this year and expect it to happen at the end of the 3rd quarter - according to the CME FedWatch Tool, markets see a 60% probability of rate cut at the Fed meeting in September.