Gold consolidates Thursday’s gains below $1440 ahead of US NFP data

• US 10-year Treasury bond yield continues to push lower on Friday.
• Nonfarm Payrolls in US is expected to rise 164K in July.
• US Dollar Index posts modest losses, stays above 98.  

The troy ounce of the precious metal gained more than $25 on Thursday after United States President Donald Trump announced 10% tariffs on the remaining $300 billion worth of Chinese imports and triggered a flight-to-safety, helping traditional safe-havens find demand. With the trading action turning subdued ahead of the day’s critical macroeconomic data releases from the US, the XAU/USD pair is staging a technical correction, losing 0.5% on the day at $1436.

However, the fact that the 10-year US Treasury bond yield is losing 3% following Thursday’s drop of more than 5% suggests that the market sentiment is still sour, making it likely for gold to stay resilient against the dollar. Furthermore, major European equity indexes are staying deep in the negative territory to confirm the dismal mood.

Eyes on US jobs report

In the second half of the day, the US Bureau of Labor Statistics (BLS) will release its labour market report, which will include Nonfarm Payrolls (NFP), Unemployment Rate, Average Hourly Earnings, and Labor Force Participation figures. The market consensus points to the NFP edging lower to 164,000 from 224,000 in June.

Previewing the data, “We expect job creation in the manufacturing sector to mean-revert after the five-month high 17k increase in June,” said TD Securities analysts.

“We forecast employment in the services sector to moderate somewhat from its firm June print. All in, the household survey should show the unemployment rate remained steady at 3.7%, while we expect wages to rise 0.2% m/m, leaving the annual print unchanged at 3.1% in July.”

Technical levels to watch for