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On July 05, 2024, the US Dollar Index (DXY) remained steady following the release of the latest US Jobs Report, which indicated that 206k new jobs were created, slightly surpassing the expectations of 190k. However, the previous month’s figures were revised downwards significantly from 272k to 218k. The unemployment rate in the US also saw a slight increase to 4.1% from the previous reading of 4%. Additionally, average hourly earnings met forecasts at 3.9% year-on-year and 0.3% month-on-month.
After the release of the US Jobs Report, the US dollar showed minimal movement, with the dollar index (DXY) fluctuating around the 105 level. Market participants have adjusted their interest rate expectations, now fully pricing in two 25 basis point rate cuts this year. Meanwhile, gold prices have remained within a multi-month range, testing levels last seen in early June.
The US Dollar’s stability post the jobs report has led to a slightly bullish sentiment in the market. On the other hand, gold prices took a hit after a Bloomberg report stated that China had ceased buying gold, causing the precious metal to drop $20 per ounce rapidly. A confirmed break below the $2,315 per ounce level could open the way for a retest of $2,280 per ounce.
Retail trader data indicates that 58.32% of gold traders are net-long, with a long-to-short ratio of 1.40 to 1. This data suggests a mixed sentiment on gold prices. Traders being net-long may lead to further downward pressure on gold prices, but recent changes in sentiment point to a potential shift in the trading bias.
Overall, the latest US Jobs Report and its impact on the US Dollar Index, as well as the dip in gold prices following China’s gold buying halt, have stirred market sentiments. Investors are closely monitoring these developments to gauge future market trends. What are your views on the US Dollar and Gold – bullish or bearish? Let us know your thoughts!