Gold Outlook: How Would Gold React to a Negative US Jobs (NFP) Release?

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Gold Outlook: How Would Gold React to a Negative US Jobs (NFP) Release?
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Tomorrow’s US Labor Report (NFP) is now expected to show that the US jobs market contracted in January due to the Omicron spread and subsequent lockdown. Get your market update from nickcawley1 here:

Tomorrow’s US Labor Report is now expected to show that the US jobs market contracted in January due to the Omicron spread and subsequent lockdown. Wednesday’s private payroll report surprised some in the market and turned negative for the first time in a year with jobs losses led by the service sector. This is now expected to be the case in Friday’s NFP release although official market estimates are still suggesting jobs market growth in the first month of 2022.

Market professionals will have factored in the Omicron effect into market prices but a contracting US jobs market will likely make front-page headlines in the weekend press. With gold’s fortune still tied to theand underlying US interest rates, anything that can move these markets, however short the timeframe, will need to be closely followed.

The recent sharp sell-off in gold has returned the precious metal back into a well-defined trading between $1,763/oz. and $1,837/oz. with any breakouts from this range pulled back quickly. Volatility remains low – using the Average True Range indicator – while gold is neither oversold or overbought. Maybe a burst of volatility post-NFP on Friday will give traders an opportunity within the previously mentioned range.

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