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  • Nonfarm Payrolls in US increased by 130K compared to market expectation of 158K.
  • US Dollar Index edged lower on uninspiring NFP reading.
  • 10-year US Treasury bond yield erased majority of daily gains.

The troy ounce of the precious metal lost more than $30 on Thursday and extended slide to a fresh two-week low of $1,502 earlier today pressured by the upbeat market sentiment. With the Greenback coming under a renewed bearish pressure in the last hour following the mixed labour market data form the US, the XAU/USD pair made a sharp U-turn and turned positive on the day. As of writing, the pair was up 0.18% on the day at $1,522.

Greenback weakens on dismal NFP print

In its monthly report, the US Bureau of Labor Statistics reported that Nonfarm Payrolls in August increased by 130,000 and fell short of the market expectation of 158,000. Additionally, July’s reading of 164,000 got revised down to 159,000. On a positive note, wage inflation as measured by the average hourly earnings rose by 0.4% on a monthly basis to come in slightly better than analysts’ estimate of +0.3%.

The market reaction to the data suggests that investors are expecting the Federal Reserve to opt-out for an aggressive policy action later this month. The 10-year US Treasury bond yield turned south and erased all of its daily losses and the US Dollar Index dropped below the 98.30.  

Later in the session, FOMC Chairman Jerome Powell will be delivering his remarks on the economy and the policy outlook.

Technical levels to watch for