Gold Price Analysis: XAU/USD sticks to modest gains near $1800 mark post-NFP

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  • A modest USD pullback assisted gold to regain some positive traction on Friday.
  • Mixed US jobs data failed to impress the USD bulls or provide any impetus to metal.
  • Rallying US bond yields, the upbeat market mood might cap any meaningful gains.

Gold held on to its modest daily gains around the $1800 mark and had a rather muted reaction to mixed US monthly jobs report.

A combination of factors failed to assist the precious metal to preserve its early gains, rather prompted fresh selling around the $1811-12 region. The upbeat market mood was seen as one of the key factors that capped gains for the safe-haven XAU/USD. Apart from this, a sudden pick up in the US Treasury bond yields exerted some pressure on the non-yielding yellow metal.

The bond market has been reacting to the prospects of a massive US fiscal stimulus measures. This, along with better-than-expected US monthly employment details, pushed the yield on the benchmark 10-year government bond to near one-year tops. The report showed that the unemployment rate dropped to 6.3% in January as against estimates pointing to a steady reading of 6.7%.

The positive figure, to a larger extent, was offset a slight disappointment from the headline NFP print that the US economy added 49K new jobs as compared to 50K anticipated. This, in turn, kept the US dollar bulls on the defensive and extended some support to the dollar-denominated commodity, at least for the time being.

With Friday’s key data out of the way, it will now be interesting to see if the XAU/USD is able to capitalize on the modest gains or meets with some fresh supply at higher levels. Nevertheless, the broader market risk sentiment, the US bond yields and the USD price dynamics would continue to play a key role in influencing the commodity.

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