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  • Dented by better risk sentiment, stronger USD on hopes of upbeat US payrolls.
  • 1250 or 1300 on the US labor market report?

Gold (futures on Comex) stalled its modest recovery near 1274 levels and now heads back towards the four-month lows reached at 1266 on April, 23rd.

Gold: All eyes on NFP

The yellow metal came under fresh selling pressure as markets prefer to hold the US currency heading into the crucial US non-farm payrolls and wage growth data, with both parameters expected to arrive stronger and point to solid US labor market. The greenback also finds some support from the recent upbeat ADP and ISM manufacturing PMI reports.

NFP leading indicators: Balanced picture ahead of April’s US jobs report

Moreover, persisting risk-on action in the global equities, US equity futures and Treasury yields amid improving Eurozone and UK fundamentals also add to the negative tone around the safe-haven gold.

Gold prices hit fresh weekly lows at 1267.45 on Thursday after the US dollar rallied hard across the board after the Fed poured cold water on the rate cut bets while downplaying inflation risks.

The Fed Chair Powell said that inflation risks flagged during the release of the US GDP data were only based on transitory factors and that there is no immediate need to move the interest rates in either direction.

Markets now eagerly await the US payrolls data for the next move in the precious metal. Upbeat readings could push gold prices further south to test the 1250 psychological support. On the flip side, if the figures disappoint, the bullion could bounce-back towards the 1300 mark.

Gold Technical Levels