Gold price remains confined in a narrow range around the $1,930 level.
The upbeat data could convince the Federal Reserve (Fed) to hike additional rates.
The renewed tensions between the US-China might benefit gold, a traditional safe-haven asset.
All eyes are on the US Nonfarm Payrolls, Unemployment Rate data due later in the day.
The gold price oscillates around $1,935 heading into the early European session on Friday. Market participants await the US Nonfarm Payrolls figure due later in the American session.
The top-tier data from the US on Thursday showed that the Initial Jobless Claims increased to 227,000 for the week ended July 29, matching market consensus. Meanwhile, the ISM Service PMI for July dropped to 52.7 from 53.9 prior and was worse than expected at 53. Unit Labor Costs from Q2 increased to 1.6%, lower than the 2.6% expected.
Gold traders will take cues from the US wage inflation and employment release on Friday. The stronger-than-expected report could convince the Federal Reserve (Fed) to hike additional rates for the entire year. This, in turn, benefits the Greenback and acts as a headwind for XAU/USD. It’s worth noting that gold is sensitive to rising interest rates as they raise the opportunity cost of holding non-yielding bullion.
Furthermore, the US House committee said on Thursday that President Joe Biden needs to limit outbound US investment in China, particularly in key industries that might undermine national security. Biden may impose further outbound investment restrictions on China in the coming weeks, Reuters sources said. The escalating tensions between the US-China might exert some pressure on the US Dollar and benefit gold, a traditional safe-haven asset.
Looking ahead, all eyes are on the US Nonfarm Payrolls data due later in the day. The US economy is expected to have created 180,000 jobs in July. Also, the Unemployment Rate and Average Hourly Earnings will be released on Friday. The Unemployment Rate is expected to remain at 3.6%, and Average Hourly Earnings YoY are expected to increase by 4.2%. Market participants find trading opportunities around the gold price.
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