July Non-Farm Payrolls in Focus, Weak Employment May Push Up Gold Prices

The July employment report, which will be released at 8:30 PM Beijing time on Friday, August 1, is expected to show an increase of 110,000 jobs, a significant decline from 147,000 in June; the unemployment rate is expected to rise slightly from 4.1% to 4.2%; the average hourly wage month-on-month is expected to rise by 0.3%, higher than June's 0.2%. If the forecast is accurate, this will strengthen the view of a slowing job market, although it may not necessarily require a response from the Fed.

At the interest rate meeting earlier this week, Powell did not provide guidance on the September interest rate decision and pointed out that there is a lot of data to be released before that. The July non-farm report on Friday will be a piece of the puzzle that helps influence the Fed's expectations for a rate cut in September.

Analysis indicates that if non-farm payroll data is below 100,000 and the unemployment rate rises, it may suggest a weakening job market, dampening the Fed's hawkish expectations and putting pressure on the dollar, which would be favorable for a rebound in gold prices.

However, if the non-farm payroll data unexpectedly exceeds 150,000, the strength of the dollar may continue, as strong U.S. employment data could rule out the possibility of the Fed cutting interest rates twice this year.