Daily Digest Market Movers: Gold price is pressured by a further USD recovery; Fed rate cut bets to limit losses
- The US Dollar builds on the previous day's strong recovery from its lowest level since March 21 and drags the Gold price lower for the third successive day on Friday.
- The US Bureau of Labor Statistics (BLS) reported on Thursday that the number of Americans filing for unemployment benefits in the week ending July 13 rose to 243K.
- Additional details of the report revealed that the 4-week moving average swelled to the highest level in more than 2-1/2 years, pointing to a loosening labor market.
- This, along with ebbing inflation, paves the way for an imminent start of the Federal Reserve's rate-cutting cycle, offsetting the upbeat US manufacturing data.
- In fact, the Philadelphia Fed Manufacturing Index remained in positive territory for a sixth straight month and rose to 13.9 from 1.3 in the previous month.
- Nevertheless, the CME Group's FedWatch Tool indicates that markets are pricing in a 100% chance of a rate-cut in September and an additional two cuts by year-end.
- Meanwhile, former President Donald Trump said that Taiwan should pay the US for defense, raising doubts over the US commitment to defend Taiwan in the event of an attack by China.
- This comes on top of geopolitical tensions stemming from conflicts in the Middle East and the protracted Russia-Ukraine war, which should lend support to the XAU/USD.
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