XAUUSD NFP 7-6-24 ANALYSIS

📌Market Sentiment and Expectations:💹

🔵Federal Reserve Rate Hikes: Markets have lowered their expectations for more than one Fed interest rate hike this year, influenced by persistent inflation and recent hawkish statements from the Fed. The CME Fed Watch Tool indicates a 50% probability that the Fed will hold rates in September, with a 64% chance of a rate cut in November.

🔵US Dollar Dynamics: The hawkish Fed stance had initially boosted demand for the USD, with US Treasury bond yields reaching multi-week highs. However, the downward revision of the annualized first-quarter US GDP to 1.3% from 1.6% and a slight rise in Initial Jobless Claims created headwinds for the USD, leading to a selloff alongside US Treasury bond yields. This development supported a modest recovery in gold prices after significant losses on Wednesday.

Upcoming Influences:
The future of gold prices hinges on the forthcoming US Core PCE inflation data, due later in the American trading session on Friday. The Core PCE Price Index is anticipated to rise by 2.8% year-over-year in April, maintaining the same pace as observed in March.

📌Scenario 1: If the Core PCE inflation data exceeds expectations, it could delay aggressive Fed rate cut expectations, bolstering the USD and impacting gold prices negatively into the $2340-$2310- $2290 range, depending on data release and market sentiments.

📌Scenario 2: Conversely, if the data indicates unexpected softness in Core PCE inflation, it may increase the likelihood of a September Fed rate cut, supporting a further rebound in gold prices.

Alternative Scenario:
US inflation data might push XAUUSD into the $2395/2420/2448 range, depending on the outcome of the upcoming economic indicators.