Gold Prices Depend on Economic Indicators This Week

After experiencing a significant decline over the past few decades, precious metals are now showing signs of recovery. However, the fundamental market conditions still do not fully support sustained price increases. According to analysis from the Investinglive platform, Giuseppe Dellamotta emphasizes that various economic indicators will be the determining factors for the direction of gold movement in the coming period.

Weak Foundations Behind Gold’s Recovery

Although gold is bouncing back from its lows, short-term projections remain full of uncertainty. Analysts expect that the prices of precious metals will likely continue to fluctuate within a wide range below the peak recorded in January. The risk of further declines remains a real threat in the coming weeks or months.

Data released last week showed that the US ISM manufacturing PMI performed encouragingly, with new order indicators reaching their highest level since 2022. Although this positive signal was detected, a massive sell-off wave has not yet been triggered. This is because the Federal Reserve is more focused on labor market dynamics and inflation trajectories rather than paying full attention to manufacturing indicators alone.

Employment Indicators as the Main Trigger

ADP employment data and the upcoming ISM services PMI report to be released today are critical indicators that the market will monitor. If both data releases show figures stronger than expectations, it could trigger a more hawkish reassessment of future interest rate projections. This dynamic will put significant pressure on gold prices and potentially push them lower.

On the other hand, if these data show unexpected weakness, the momentum of gold’s recovery is likely to continue. In this scenario, precious metal prices could break new record highs while traders await next week’s non-farm payroll report, which will provide a more comprehensive picture of the labor market’s health.

In short, the range of gold movements in the coming days will heavily depend on the quality of the economic indicators released, especially labor and inflation data, which are the main obsessions of monetary authorities.