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Here’s the XAUUSD update for October 5, 2023. For the first time in nine trading days, gold prices entered the green zone on Thursday morning, as sellers took a break after reaching the lowest sales point around $1,815.
A positive shift in risk sentiment, driven by various fundamental factors, has saved gold prices, but further recovery remains challenging ahead of the crucial U.S. Non-Farm Payrolls (NFP) report on the upcoming Friday.
Gold Prices Benefit from U.S. Bond Market Developments
Gold prices managed to halt their eight-day losing streak this Thursday, taking advantage of better conditions in the U.S. bond market, while still awaiting U.S. economic data that will influence the next moves.
U.S. Treasuries saw significant strengthening as the bond market got relief from a 5% drop in oil prices, weak U.S. employment data from the ADP report, and ISM Services PMI.
Weaker-than-expected U.S. employment data has reduced expectations of a rate hike by the U.S. Federal Reserve in November, leading to a sharp drop in U.S. Treasury yields across the curve. This helped push gold prices higher along with gains in the bond market.
According to the ADP report released on Wednesday, U.S. private sector growth only reached 89,000 jobs in September, down from the revised increase of 180,000 jobs in August and well below the estimated 160,000 jobs.
The U.S. ISM Services PMI also fell from 54.5 to 53.6 in September, although it still met expectations. After this data release, the probability of a Federal Reserve rate hike in November dropped to 23%, compared to about 31% before the data was published. The market also began to question the resilience of the U.S. economy and the Fed's view that interest rates might stay higher for a longer period.
In this context, the U.S. Dollar has been declining for three consecutive days against other major currencies, currently trading near 106.50. Meanwhile, the yield on 10-year U.S. government bonds faces challenges at the 4.70% level.
However, it remains to be seen if gold prices will continue to maintain their recovery momentum, as traders await U.S. mid-level weekly jobless claims data as a potential new catalyst.
The U.S. Non-Farm Payrolls (NFP) report on Friday will be the determining factor in deciding whether this is a strong rebound or a reversal supporting gold prices. The U.S. economy is expected to add about 170,000 jobs in September, down from 187,000 jobs reported in August.
Unemployment is expected to be slightly lower, around 3.7%, while average hourly earnings are anticipated to rise by about 4.3% in the reported period, maintaining the same pace as in August.
Warning!
This explanation of "XAUUSD Today: October 5, 2023 – Rebound But Not Yet Complete" is based on fundamental and technical analysis from reliable sources. It is not a recommendation or an invitation. Always remember that this content aims to enrich readers' information. Always conduct independent research on other forex information as a reference in your trading.
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