Spot gold prices contracted in Thursday’s trading as traders shift their focus towards the US non-farm payroll. Wall Street is preparing as analysts forecasts a sharp drop in the NFP report on Friday.
Several factors affect spot gold prices in today’s trading, causing it to swing from green to red territories in sessions. Among those factors, XAU traders focus more on the upcoming non-farm payroll and the ADP employment data.
The ADP National Employment Report on Wednesday showed private wage growth in August did not turn out as strong as expected. The US employment data come ahead of the non-farm payroll report.
According to an economist, small businesses in the US have become more hesitant and careful in hiring. If businesses become more hesitant, they could slow down hiring processes and trigger unemployment to rise.
The XAU USD declined by 0.22% or 3.28 points and currently trades at $1,496.63 in today’s trading. Spot gold prices have gone down as low as $1,495.92 and as low as $1,503.66 in sessions.
Gold futures also fell by 0.31% or 4.55 points in sessions.
Another factor that affects spot gold prices in sessions is the expected wage growth in the United States for September. Wage growth in the US is expected to dip to 0.3% from 0.4%.
Despite entering negative territories, spot gold prices started the sessions on a positive note. Traders were expecting the precious metal to hold on to the gains it acquired from the earlier half of the sessions.
Elsewhere on the market, Silver futures dropped by 0.57% or 0.101 points, trading for $17.582 in sessions.
Even with the loss of spot gold in sessions, other precious metals gained in today’s trading. Platinum futures rose 0.15% or 1.30 points in sessions. And Palladium contract went up by 0.13% or 2.20 points.
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On the other hand, base metals did fairly well in today’s trading. Lead futures went up by 0.49% or 10.25 points.
And nickel futures rose 0.73% or 127.50 points, while aluminium futures slipped 0.07% by 1.25 points.
A Push from Tariffs
The recent announcement from Washington also pushed back spot gold prices in sessions. The XAU USD pair further slipped after US stocks tumbled this Thursday.
The United States will enforce 110% sanctions on European-owned Airbus aircraft and another 25% tariffs on alcohol and other goods. Washington enacts the levies as a punishment for illegal subsidies on EU planes.
Aside from those, EU manufacturers already face tariffs on metal exports such as steel and aluminium. The United States President Donald Trump is also threatening more sanctions on EU automobiles and parts.
The new round of tariffs was announced yesterday and was already approved by the World Trade Organization. Despite the approval, critics say that the tariffs could still cause friction between the United States and the European Union.
If the situation between the two escalates and the EU retaliates, it could help slow the economy. Once that happens, spot gold prices could reclaim their safe-haven appeal in sessions.