Ounce gold is at 4 thousand 155 dollars before employment data

On the last trading day of the week, ounce of gold is traded at 4 thousand 155 dollars in Asian markets.

While the pressure on the precious metal, which is preparing for its second weekly decline, continues, the eyes of the markets are turned to the employment data from the USA.

The US Bureau of Labor Statistics will announce employment data for September at 15.30 Türkiye time.

The data will shape the outlook for the US labor market as well as expectations regarding the Fed's interest rate decisions in the October and December meetings.

MARKET EXPECTATION IS 90 THOUSAND NEW EMPLOYMENT

The main expectation of economists is that non-agricultural employment, which increased by 162 thousand people in August, will increase by 90 thousand people in September.

While the unemployment rate is expected to remain at 4.1 percent, average hourly earnings are expected to increase by 0.3 percent monthly.

Following the data to be announced, two basic scenarios stand out for gold prices.

STRONG EMPLOYMENT MAY INCREASE THE PRESSURE ON GOLD

If employment growth significantly exceeds the expectation of 90 thousand people, unemployment remains low and wage increases are strong, the perception that the US labor market is resilient may strengthen.

Such a situation may increase the expectation that the Fed will follow a tighter interest rate policy or keep interest rates high for a longer time.

Due to the rise in bond interest rates and the effect of the strong dollar, the level of 4 thousand dollars in non-interest bearing gold may come to the fore again.

MAY PROVIDE RECOVERY UNDER WEAK DATA

If employment remains below 90 thousand, the unemployment rate rises or wage increases weaken, the interest rate increase pressure on the Fed can be expected to ease.

If US bond interest rates decline and the dollar weakens, the selling pressure on gold may decrease and prices may recover.

BOND INTEREST RATES AND STRONG DOLLAR PRESSURE

US bond yields and the strong dollar are effective in the recent selling pressure in gold.

The fact that the US 10-year bond interest rate increased to 5.34 percent this week, its highest level since 2002, and the Dollar Index reached its 17-month peak, made gold more costly for investors using other currencies.

Following the soft inflation data recently announced in the USA, the possibility of an interest rate increase at the October meeting decreased from 70 percent to 25 percent.

However, strong employment data to be announced today may lead to a change in interest rate expectations again.

THERE ARE TWO CRITICAL DATA IN FRONT OF THE GOLD

The Fed's next interest rate meeting will be held on October 27-28.

Following the employment report to be announced at 15.30 today, the US consumer inflation data to be published on October 14 will be the second important test in October for the gold market.

Although high interest rates and strong dollar pressure come to the fore in the short term, long-term demand for gold continues.

According to World Gold Council data, central banks purchased a net 23 tons of gold in July and a total of 130 tons in the first seven months of the year.

The fact that central banks continue their tendency to diversify reserves supports the continuation of structural demand for gold during declines in prices.