For interest rate-sensitive gold investors, their vigilance regarding a potential Federal Reserve rate hike this year remains unresolved, primarily due to the belief that the Fed will closely monitor the possibility of another surge in US inflation, thus necessitating preventative action. Investors believe the Fed has room to raise rates based on the fact that the US economic situation and job market have not yet turned pessimistic.

Therefore, the latest US non-farm payroll data for May, released later tonight, will either reignite or alleviate investor concerns about an imminent rate hike. If tonight’s data falls short of the widely expected 85,000, investors will likely interpret it as a loss of momentum in the employment data, reinforcing the assumption that the Fed may not be actively considering rate hikes. This could support risk-averse buying of gold and potentially provide upward momentum for prices. Conversely, if the result is significantly higher than expected and falls short of previous figures, it should exert downward pressure on gold prices.

A position can be established around $4,426, with a short-term target of $4,538 for profit-taking and a stop-loss at $4,406.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com