The price of gold has hardly changed, as market participants took a wait-and-see attitude ahead of the publication of key data on the US labor market, which may clarify the timing of the Fed's monetary policy easing.
Since the beginning of the week, prices have fallen by 1.1%, further retreating from the record high reached on April 12. The price correction was caused by the easing of geopolitical tensions in the Middle East, as well as a reassessment of the timing of the Fed's rate cuts. Following its May meeting, Fed policymakers indicated that they still intend to ease monetary policy, but the latest inflation data suggests that rates will remain at the current level for a longer time. According to the CME FedWatch Tool, markets see a 14.2% probability of a 25 basis point rate cut at the Fed meeting in June, a 35.5% probability of a rate cut in July, and a 62.6% probability of monetary policy easing in September. Bullion is considered an inflation hedge, but elevated interest rates reduce the appeal of the non-yielding asset.
As for the data, economists expect that employment growth slowed to 238 thousand in April from 303 thousand in March, while wages probably continued to grow steadily (+0.3% m/m and +4.1% per annum), which will dispel fears that the economy has stalled after a significant decrease in activity in the first quarter. The unemployment rate, according to forecasts, has not changed, amounting to 3.8%. Experts said that softer U.S. payrolls print could provide support for gold but a better report may weigh on prices.