What Recent US Economic Data Says About XAU/USD Trends on 10-12-2024

Increased Productivity and Its Effect

• Higher Nonfarm Productivity: Indicates that workers are producing more output per hour. This suggests economic efficiency and growth without added inflationary pressure.
  • Impact on Gold: Reduced demand for gold as a hedge against economic instability, causing XAU/USD to decline.
  • USD Strength: A robust economy strengthens the USD, making gold more expensive in other currencies and reducing global demand.

Lower Labor Costs and Inflation Expectations

• Decreased Unit Labor Costs: Signify reduced wage pressures on businesses, lowering the likelihood of rising inflation.
  • Impact on Gold: Gold is often seen as a hedge against inflation. With reduced inflation concerns, the need for gold diminishes, leading to bearish pressure on XAU/USD.
  • USD Strength: Stable inflation expectations allow the Fed to maintain a “higher-for-longer” interest rate policy, bolstering the USD.

Technical Influence on XAU/USD

• Positive economic data often triggers algorithmic and speculative trades that amplify trends in asset prices.
  • Gold Selling Pressure: Technical traders may capitalize on negative sentiment for gold, accelerating the drop in XAU/USD.