U.S. Labor Market Indicators and Their Impact on Gold

The U.S. Department of Labor reported on Thursday that unemployment insurance claims increased by 229,000 in the week ending June 1, higher than expected. This, combined with the ADP report on private-sector employment, indicates a cooling U.S. labor market, solidifying bets for a September Fed rate cut.

The yield on the 10-year U.S. Treasury bond is near its lowest level in two months, undermining the dollar and supporting gold prices. Despite the strong bullish sentiment in global equity markets, traders remain cautious ahead of the crucial U.S. employment data release.

The Nonfarm Payrolls (NFP) report is expected to show that the U.S. economy added 185,000 jobs in May, up from 175,000 previously, with the unemployment rate steady at 3.9%.

Average Hourly Earnings will also be closely watched for their impact on inflation and the Fed’s future policy decisions, which will help determine the next direction for XAU/USD.

Short-Term Forecast

Gold prices (XAU/USD) are expected to remain bullish, trading at $2,376.58, up 0.20%, as they approach key highs amid growing anticipation of Federal Reserve interest rate cuts. Positive momentum is supported by weak U.S. economic indicators and dovish expectations. Maintaining above the pivot point of $2,364 indicates a bullish outlook.