Tonight, the United States is set to release important figures at 8:30 PM WIB. The US unemployment claims data has come in better than market expectations, with the recorded claims totaling 213K, which is lower than the forecast of 215K from Trading Central and also below the previous figure of 220K. This decrease in unemployment claims suggests that the US labor market remains relatively robust, potentially providing a positive boost to the overall economy. This data may indicate that the US economic recovery is progressing well, supporting further interest rate hike expectations from The Fed.
However, while the unemployment claims data is positive, tonight’s Producer Price Index (PPI) data has a larger impact on the markets. The PPI was reported at 3.5%, slightly above the Trading Central forecast of 3.4% and higher than the prior level of 3.3%. This increase in PPI points to persistently high producer inflation, which could heighten expectations that The Fed might adopt a more aggressive monetary policy to control inflation, thereby negatively impacting interest-sensitive assets like gold.
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Following the release of this data, the price of gold dropped to 2,908, reflecting market concerns about the possibility of quicker interest rate hikes. The rise in PPI signals that inflation remains a significant issue that needs to be addressed, which could boost the value of the US dollar and reduce demand for gold as a safe-haven asset. With this mixed economic data backdrop, the markets will be closely watching The Fed’s future policy responses, which could influence the short-term direction of gold prices.
After the release of these crucial data points, the GBPUSD and EURUSD currency pairs also exhibited significant volatility. The GBPUSD fell to 1.2452, while the EURUSD also dipped, testing the support level at 1.0375.
