European Markets Wrap: Gold Advances Above $4,300, Dollar Subdued Ahead of US Jobs Report
Key Takeaways
- •European market trading was subdued as participants awaited the July US nonfarm payrolls report, which serves as a closely watched input for Federal Reserve interest rate decisions.
- •Gold prices climbed 1.8% to $4,316, extending a technical breakout with the next key level at the 100-day moving average of $4,390.
- •China continued its gold buying spree in July, with reserves increasing for a 21st consecutive month and underpinning bullion demand.
- •US equity futures posted modest gains, with S&P 500 futures up 0.1% and Nasdaq futures rising 0.4% as technology shares attempted to recover ground.
- •The dollar traded in a narrow range, with EUR/USD holding flat at 1.1528 and USD/JPY slipping marginally to 158.30, as traders refrained from significant positioning before the jobs release.
European markets experienced a relatively quiet session as traders paused ahead of the highly anticipated US nonfarm payrolls report for July, scheduled for release later today.
Headlines
- All eyes on the US jobs report now
- What is the distribution of forecasts for the US NFP?
- Gold stays supported amid Middle East de-escalation, but the US CPI could erase the gains
- Trump says a rate hike isn't completely up to Warsh, it's up to the Board
- How have interest rate expectations changed after this week's events?
- China gold buying spree continues in July as reserves climb for a 21st consecutive month
Market Snapshot
- Gold up 1.8% to $4,316
- WTI crude oil down 0.4% to $76.93
- CHF leads, CAD lags on the day
- European equities higher; S&P 500 futures up 0.1%
- US 10-year yields down 1 bps to 4.66%
- Bitcoin up 0.8% to $64,900
Session Overview
Trading activity was subdued as market participants took a breather before the release of the July US employment report. The nonfarm payrolls data is a closely watched input for Federal Reserve policy decisions, as labor market strength directly influences the pace and timing of interest rate adjustments. While US-Iran tensions remain an ongoing backdrop, the lack of further developments left traders with little impetus to take significant positions.
Gold prices continued their upward trajectory, climbing above $4,300 in line with Wednesday's technical breakout. The next key technical level to watch is the 100-day moving average at $4,390. Support for bullion has also been underpinned by sustained central-bank demand, with China's gold reserves climbing for a 21st consecutive month in July.
US equity futures were more cautious, with technology shares attempting to recover some ground ahead of the weekend. S&P 500 futures edged up 0.1%, while Nasdaq futures gained 0.4%.
The dollar traded in a narrow range against major currencies ahead of the main event. EUR/USD held flat at 1.1528, and USD/JPY slipped just 0.1% to 158.30. A stronger-than-expected jobs print could reinforce the dollar, while a downside surprise would likely fuel expectations of an earlier Fed pivot.
In the commodity markets, oil prices gave up earlier gains, with WTI crude declining 0.4% to $76.93. In bonds, US 10-year yields were down 1 basis point to 4.66%.
Overall, market movement was limited, with attention now turning to the US jobs report as the potential catalyst to provide direction before the weekend.