Similarly, US Treasury yields have risen, with the 10-year benchmark breaking key resistance at 4.70%. This breakout in yields signals market confidence in economic growth and rising inflation expectations. The Fed’s more cautious stance on rate cuts, especially as inflation remains persistent, has contributed to the rise in yields. The market is now pricing in a less aggressive approach from the Fed, with the likelihood of interest rate increases or decreases remaining low in the short term.
Despite the positive data for the US economy and the rise in the US dollar, gold (XAU) has experienced positive momentum. Gold prices continued their rally on Friday, consolidating around $2,689 as investors digested strong labor market data. As the Fed navigates between managing the strength of the labor market and inflation, gold remains an attractive hedge against economic uncertainties, especially as Treasury yields continue to rise.
Gold (XAU) Technical Analysis
Gold daily chart – breakout from symmetrical triangle
The daily chart for gold shows that the price has broken out of the symmetrical triangle after the release of the NFP data. The RSI is recovering from the mid-level, indicating bullish momentum. Therefore, a break above $2,720 is likely to continue the upward move.