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Gold surges to record high on US NFP report

Monday, March 11, 2024

Today’s headlines

What’s happening: Gold prices rose to a new record high on Friday, following the release of the US jobs report.

What happened: The NFP (nonfarm payrolls) report released on Friday showed a rise in the US jobless rate, which raised prospects of an early rate cut from the Federal Reserve.

Gold prices surged for the eighth consecutive session and notched gains for the week.

Why it matters: Gold prices extended its record rally on Friday, following the NFP report showing a rise in the US jobless rate and an easing in wage growth, despite acceleration in jobs growth.

The US unemployment rate rose by 0.2 percentage point to 3.9% in February, reaching the highest level since January 2022. The figure also came above market estimates of 3.7%. Average hourly earnings of nonfarm employees rose by 0.1% to $34.57 in February, compared to a 0.5% gain in January. However, the US economy still added 275,000 jobs in February, beating market expectations of 200,000.

There were growing speculations of the US Federal Reserve beginning interest rate cuts in May, although most traders still expect the first rate cut in June. Lower rates reduces the opportunity cost of holding gold.

Some weakness in the US dollar also lent support to gold prices, as a lower greenback makes the dollar-denominated bullion cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped around 0.1% to 102.74 on Friday. The yield on the 10-year US Treasury also declined to more than a one-month low during the session.

A surge in global prices for gold is also expected to negatively impact consumption during the major wedding season in India, the world’s second-largest gold consumer.

Gold futures jumped 0.9% to settle at $2,185.50 an ounce on Friday, recording a weekly gain of around 4.5%.

In other metals trading, silver futures fell 3 cents to close at $24.55 an ounce, copper lost 4 cents to reach $3.89, platinum declined by around 1% to $914.8 and palladium settled lower at $1,025.30.

What to watch: Investors will continue monitoring comments from the US Federal Reserve regarding interest rate cuts, which are expected to significantly impact gold prices ahead. Demand from Indian buyers will also remain in focus.

Data on US consumer inflation expectations will be released today. US consumer inflation expectations for the year ahead are expected to remain steady at 3% in February.

The markets today

Bitcoin will be in focus today, after surging to new record highs on Friday

Context: Bitcoin prices recorded gains on Friday, surpassing the $70,000 level during the session.

Details: Bitcoin surged to a new all-time high, with rising acceptance of cryptocurrencies among economic uncertainties. High volumes of cryptocurrencies used for retail purchases sent the world’s largest cryptocurrency past $70,000 on Friday.

After touching the major $70,000 level, Bitcoin pared some gains to trade around the $68,000 mark.

Ethereum, the world’s second-biggest cryptocurrency by market valuation, also reached $4,000 for the first time since December 2021. Ethereum recorded sharp gains throughout the week, almost double of its larger rival, amid growing speculations of the token being the next to receive approval from the US SEC (Securities and Exchange Commission) for Ethereum ETF.

Tokens, including Dogecoin and Pepe, recorded double-digit percentage gains during the session, extending gains recorded earlier in the week.

Shares of Coinbase also jumped close to 18% over the week, with surging crypto volumes.

What to watch: Investors will continue monitoring the potential approval of a spot Ethereum ETF, which is expected to provide a significant boost to crypto price ahead. Geopolitical factors will also remain in focus.

Other Markets: European indices closed mixed on Friday, with the CAC 40 and STOXX Europe 600 Index up by 0.15% and 0.02%, respectively, and the FTSE 100 and DAX 40 down by 0.43% and 0.16%.

The news shaping the markets

Ukraine said its air defence systems had destroyed 35 of 39 drones that Russia launched on Sunday night. The news sent the RUB/USD pair slightly lower in forex trading this morning.


Ireland’s BNP Paribas Real Estate Construction PMI rose to 47.4 in February, from 45.9 in January, which lent support to the EUR/USD forex pair.


Indonesia’s motorbike sales fell 2.9% year-over-year to 558,700 units in February, sending the IDR/USD pair lower in forex trading this morning.


Japan’s economy grew by 0.4% in the fourth quarter, following a 3.2% decline in the prior quarter, lending support to the JPY/USD forex pair.


China’s producer prices declined by 2.7% year-over-year in February, after a 2.5% decline in January. This being the 17th consecutive month of decline in factory gate prices sent the CNY/USD pair lower in forex trading this morning.

What else to watch today

Japan’s machine tool orders, Turkey’s unemployment rate, labour force participation rate and retail sales, Spain’s retail sales, India’s total passenger vehicles sales, Eurogroup meeting, Indonesia’s total car sales, China’s vehicle sales, as well as Central Bank of Brazil’s focus market readout.


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