Here’s the update on XAUUSD for today, December 6, 2023. Gold prices have slightly increased to $2,020 early Wednesday, following the trading trend in Asia on Tuesday. Risk sentiment is not particularly strong, supporting gold prices despite the US Dollar showing no recovery over the past two days.

The market remains cautious after Moody's downgraded China's credit outlook, although the long-term rating of "A1" was maintained. Uncertainty surrounding US Federal Reserve interest rates has weakened investor sentiment following the mixed economic data released on Tuesday.

Recent data from the Institute for Supply Management (ISM) shows that the Services PMI reached 52.7 in November, up from 51.8 in October. However, US JOLTS Job Openings fell to the lowest level in 2.5 years at 8.733 million in October, indicating a weakening labor market.

The market estimates about a 60% chance of a Fed rate cut in March, but investors are awaiting the ADP US Employment Change data on Wednesday to make decisions regarding the value of the US Dollar and Gold. ADP is expected to report an addition of 130,000 jobs in the US private sector for November, up from 113,000 jobs in October.

Lower-than-expected ADP employment data could reinforce the Fed's dovish stance, leading to a decline in the US Dollar. In such a scenario, Gold prices could continue to rise to $2,050. Conversely, if risk sentiment worsens and the US employment report is positive, it could provide additional support for the recovery of the US Dollar, causing a decline in Gold prices.


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