Gold prices edged lower in early Thursday trading but remain comfortably above the key psychological level of $5,000. Yesterday’s release of the Nonfarm Payrolls report showed stronger-than-expected employment data, with the US economy adding 130,000 jobs in January, well above the forecast of 70,000 and the previous reading of 48,000. Investors interpreted the figures as a sign of resilience in the world’s largest economy, reducing the case for near-term monetary stimulus. As a result, expectations that the Federal Reserve will keep rates on hold at its March meeting have risen to 95%, supporting a strengthening of the US dollar against other major currencies. Traders are now turning their attention to the release of US inflation figures on Friday. An inflation reading above expectations (notably above 2.5%) would reinforce the view that policy easing is not imminent, supporting further dollar strength and creating additional headwinds for gold. Conversely, a softer-than-expected CPI report would likely weigh on the greenback and provide support for the precious metal.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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