- Gold remains broadly bullish above the $2,000 mark despite a recent correction.
- The dedollarization worldwide is boosting the safe haven status of gold
- The market expects a weaker US NFP that may further help the gold buyers.
Gold price (XAU/USD) is currently at $2007 early on Good Friday. The lack of liquidity due to the holiday and cautious sentiment ahead of the release of March US job data is causing XAU/USD to remain defensive.
It is important to note that recession fears have affected gold prices, but the disappointing US dollar has also played a role.
The US data and unfavorable US Treasury yields have eased recession fears among top economists. The recent US jobs data shows that the US initial jobless claims rose to 228k, higher than the expected 200k and the previous 246k.
Additionally, the number of job cuts at Challenger has increased to 89.703k from 77.77k in the previous month. JOLTS jobs in the USA fell to a 19-month low in February, while ADP jobs change in March disappointed markets at 145K read.
The US ISM Services PMI also resulted in pessimism scores and margins derived from results 54.5 and 55.1 through 51.2.
Reuters have reported recession concerns due to the recent decline in the indicator for US Federal Reserve Chair Jerome Powell’s favorite bond market. The Treasury Bill Forward is the bond market’s most reliable signal of an imminent recession.
Despite these catalysts, gold prices remain stable due to recent market moves against the US dollar’s reserve currency status. Russia’s recent sympathy for the Chinese yuan and the Sino-Brazilian agreement to ignore the US dollar as an intermediary currency has challenged the dollar’s imperial status.
Furthermore, there are rumors that some US congressmen have proposed legislation restoring the gold standard to protect the US dollar.
Looking ahead, gold prices depend on the March US payroll data. If the planned US employment report turns out to be disappointing, gold prices may increase. Market forecasts are for the Nonfarm Payrolls (NFP) headline to weaken from 311k to 240k.