Gold Soars to New High as Weak Jobs Report Shocks Markets
The gold price has staged a strong comeback, reaching its highest level since July 17 after the US Bureau of Labor Statistics released a weak non-farm payrolls report. The economy lost 23,000 jobs last month, missing the average estimate of 85k.
As a result of this weak labor market, US bond yields dropped lower, with the ten-year yield falling to 4.65% and the five-year note dropping to 4.36%. This retreat also led investors to scale back their expectations for Federal Reserve rate hikes, causing the US Dollar Index (DXY) to drop by over 2% from its year-to-date high.
The combination of weak labor market data, a weaker dollar, and falling bond yields has pushed gold above its $4,200 neckline and the 50-day Exponential Moving Average (EMA). The Relative Strength Index (RSI) is also rising, slowly approaching the overbought level of 70.
Gold's technicals suggest that it may continue to rise in the near term. If this happens, one key target to watch will be $4,500.