$4,400: Gold Bulls Refuse to Give Up Amid Rising Oil Prices and Inflationary Concerns
Gold prices are struggling to maintain above $4,400 amid a bearish market, but bulls refuse to give up. The precious metal is facing headwinds from rising oil prices and inflationary concerns, which are stoking expectations of policy tightening globally.
The latest US labor market report showed robust Nonfarm Payrolls (NFP) growth in August, nearly triple the forecast of 56,000. This has reinforced the view that the jobs backdrop remains resilient, with a private-sector outlook also looking up from a jobs perspective.
Markets are pricing in a roughly 57% chance that the Federal Reserve will hike rates this month following the NFP release. However, the downside in Gold seems capped by a broadly stable US Dollar (USD), as buyers quickly faded the post-NFP spike amid concerns over rising US government debt and the aggressively hawkish Bank of Japan repricing.
Looking ahead, Gold remains vulnerable to renewed USD strength if US-Iran tensions escalate further. Thin market conditions could exaggerate Gold price moves.