Gold starts week with yet another record high

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Gold preserved its bullish momentum and hit a new all-time high above $2,350 at the weekly opening after gaining over 4% in the previous week, marking a new record high of $2,330 on Friday.

The yellow metal faces challenges due to lowered chances of Fed rate cuts in June, while US nonfarm payrolls (NFP) added 303,000 new jobs in March, exceeding the anticipated 200,000.

Gold started the week near $2,310 per troy ounce during early Asian trading on Monday, after touching a new record high on Friday. The price of precious metal faces challenges primarily due to higher US Treasury yields, which weakens the non-yielding assets.

The recent gains in the US Dollar exert downward pressure on the XAU price as it becomes more expensive for investors holding other currencies to purchase gold, leading to a decrease in demand for the precious metal.

The Sentix Investor Confidence data for April will be featured in the European economic docket and the US calendar will not offer any high-impact data releases on Monday.

On Friday, the March NFP rose 303,000 and the unemployment rate edged lower to 3.8% from 3.9% in February. Both of these prints came in better than analysts’ estimates and helped the US Dollar stay resilient against its major rivals heading into the weekend.

52% chance of Fed rates unchanged

According to the CME FedWatch Tool, markets are pricing in a 52% probability that the Fed will leave the policy rate unchanged at the June policy meeting, up from nearly 40% before the jobs report.

The US Dollar Index (DXY) is holding comfortably above 104.00 in European trading on Monday and the benchmark 10-year US Treasury bond yield remains positive territory above 4.4%.

EURUSD staged a late rebound after dipping below 1.0800 on Friday and closed the week in positive territory. The pair is moving up and down in a tight channel below 1.0850 early Monday.

GBPUSD stabilised above 1.2600 following a volatile American session on Friday and ended the week with small gains. The pair holds steady at around 1.2620 in the early European session.

USDJPY reversed its direction after falling below 151.00 on Friday and ended the day in positive territory. The pair continues to inch higher on Monday and closes in on 152.00.

Federal Reserve Bank of Dallas President Lorie Logan emphasised on Friday that, given the upside risks to inflation, she believes it is premature to consider cutting interest rates. She stressed the necessity of resolving more uncertainty regarding the economic trajectory before making such decisions.

Logan also highlighted the importance for the Federal Open Market Committee (FOMC) to remain ready to respond appropriately if inflationary pressures cease to abate.

(Source: OANDA)