Gold Price Rebounds Amid US-Iran Tensions Ahead of Crucial NFP Data
The gold price has made a comeback in Asia on Friday, pausing its sharp pullback from seven-week highs of $4,304 reached a day earlier. However, gold bulls remain cautious ahead of the highly anticipated US Nonfarm Payrolls (NFP) data release.
Renewed tensions over the Strait of Hormuz passage have raised doubts about a potential US-Iran peace deal, reviving inflation worries and September Federal Reserve interest rate hike bets. As a result, oil prices rebounded firmly on Iran headlines, sparking concerns that could propel gold prices higher.
However, gold remains on track to book its best week since January. The Nonfarm Payrolls figure is expected to rise by 80,000 in July after a 57,000 increase in June. A strong NFP reading would likely support the US Dollar and render negative for non-yielding assets such as gold.
TD Securities noted that the ADP slowdown reinforces their view of moderating US job gains, with both the monthly and weekly ADP series having moderated this summer after a strong start to the year. The bank expects a similar trend to occur with NFP job gains.