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ECB President Christine Lagarde: I am confident that the practice of basing policy on data should be maintained.European Central Bank President Christine Lagarde: We have not seen artificial intelligence causing redundancy in the labor market.European Central Bank President Christine Lagarde: We are monitoring exchange rates, not setting exchange rate targets.On February 26th, European Central Bank (ECB) President Christine Lagarde reiterated that the ECB has successfully controlled consumer prices, but cautioned that policymakers must closely monitor perceived high inflation. She stated, "Officials will achieve the 2% growth target in the medium term. However, despite the decline in inflation, surveys show that many people still feel prices are rising faster than official data suggests." While ECB policymakers emphasized that their next interest rate adjustment will have "full flexibility," they have not indicated any intention to make any adjustments in the near term. They expect inflation to stabilize at the 2% target level in the medium term, with economic growth accelerating. However, some believe there is a possibility of inflation remaining below target for an extended period. According to the latest consumer expectations survey, perceived inflation is higher than actual data suggests. This could negatively impact private consumption and lead to higher wage demands, making the central banks task of maintaining price stability and promoting economic growth even more challenging.Gold prices fell slightly in early trading on February 26, but remained above $5,100 an ounce as investors focused on progress in US-Iran negotiations. New York gold futures edged lower as investors worried that US interest rates might remain unchanged for some time, limiting gains. However, prices still rose more than 3.5% this week, benefiting from uncertainty surrounding US trade policy and ongoing geopolitical tensions with Iran. "Any escalation of tensions involving Iran could provide further support for gold and strengthen its role as a hedge against shocks," said analysts at ING. "Meanwhile, the structural drivers behind golds previous gains remain solid."

Gold Price Prediction: XAU/USD struggles to extend gains on encouraging ADP Employment data from the United States

Daniel Rogers

Jan 06, 2023 11:12

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After falling to almost $1,825.00 during the late New York session, the gold price (XAU/USD) has tried a recovery. The precious metal is battling to continue its rebound as robust United States Automatic Data Processing (ADP) Employment Change data has prompted the risk of the Federal Reserve (Fed) maintaining higher interest rate stability for an extended duration.

 

S&P500 suffered a major sell-off from the market participants, displaying a risk-aversion theme, as bigger additions of fresh payrolls in the United States job market will require the Fed to sustain its aggressive position on interest rates for a longer term. This has also caused a possibility of recession in the US economy. The Employment Change (Dec) jumped to 235K in contrast to the predicted 150K and the previous release of 127K. In addition, the weekly Initial Jobless Claims (IJC) have decreased to 204K compared to the expected 225K.

 

The US Dollar Index (DXY) achieved a roaring rally after sustaining above the important resistance of 104.00 and rose to reach 105.00. In addition, 10-year US Treasury yields detected demand and rose to approximately 3.72 percent.

 

Investors will closely monitor Nonfarm Payrolls (NFP) data on Friday. After noticing optimistic signals from ADP Employment Change, it is quite likely that the US NFP will report data that exceeds expectations. The unemployment rate is expected to remain unchanged at 3.7%.


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