Gold extends decline after NF surpasses expectations🔴Gold extends decline after US Nonfarm Payrolls beats expectations
Gold (XAU/USD) falls all the way back to the $2,294s on Friday after the release of US Nonfarm Payrolls (NFP) data shows the US economy added 272K jobs in May when 185K had been expected. The result was also higher than the April figure which was revised down to 165K.
The US Bureau of Statistics (BLS) report showed a rise in Average Hourly Earnings of 4.1% YoY from a revised-up 4.0% in April, and beat estimates of 3.9%. The Unemployment Rate rose to 4.0%, however, when 3.9% had been forecast from 3.9% previously.
💠Overall the BLS data suggested wage inflation was rising which could feed into higher core and headline inflation.
This, in turn, could lead the Federal Reserve (Fed) to delay its decision to cut interest rates. Maintaining higher interest rates for longer is negative for Gold as it raises the opportunity cost of holding a non-yielding asset.
Gold was already falling on Friday after the news that the People’s Bank of China (PBoC) suddenly halted its Gold purchases in May after an 18-month buying stretch.
🔻Gold price deflates after People’s Bank of China halts further buying
Gold is trending lower at the end of the week after the news that Gold reserves at the PBoC remained unchanged at 72.8 million troy ounces at the end of May, the exact same figure as at the end of April, according to official data from the PBoC on Friday.
🔻The data follows strong buying in April that saw China Gold reserves at the PBoC hit an all-time high, accounting for 4.9% of total reserves, and following 18 consecutive months of growth.