The price of gold has bounced back from multi-day lows near $2030 per ounce and is currently hovering around $2,042 during the early Asian session on Thursday, showing a recovery of 0.14%. The stronger US Dollar (USD) and higher US Treasury bond yields are contributing to the pressure on the yellow metal.
In addition, the US Dollar Index (DXY), which measures the value of the USD against a weighted basket of currencies used by US trade partners, has surged to its highest level in three weeks at around 102.42. The Treasury yields have also edged higher, with the 10-year yield standing at 3.92%.
The FOMC meeting minutes were less dovish compared to the press conference at its December meeting, which has lifted the US Dollar (USD) broadly. The participants emphasized the need to maintain a cautious and data-driven approach, and they also noted that policy should remain restricted for some time.
The Institute for Supply Management (ISM) revealed on Wednesday that US Manufacturing PMI contracted further in December, despite showing improvement in production and factory employment. The Manufacturing PMI rose to 47.4 from 46.7 in the previous reading, surpassing the market consensus of 47.1.
Looking ahead, market players will be monitoring the US ADP Employment Change and the weekly Initial Jobless Claims on Thursday. Traders will be looking for more clues from the upcoming US employment data on Friday, including Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings.
Additional insight: The recovery in the price of gold amid the stronger US Dollar and higher Treasury yields reflects the ongoing impact of economic data and the FOMC minutes on the precious metal. The upcoming employment data will provide further insight into the health of the US economy and its potential impact on gold prices.
