XAU-USD jumped more than 1.5% on Friday in response to the actual Non-Farm Payrolls data missing expectations in the US. The yellow metal closed last week at $1173.06. The reading for January showed that the US economy only added 151,000 jobs versus the consensus forecast of 190,000 and a lot lower than December’s reading of 262,000. Weak job growth in the US has unnerved investors and benefitted the gold price. Recent worries about global growth have also added to bullish momentum in the yellow metal.

Slowing job growth will reduce the prospects of another interest rate hike from the Federal Reserve in March and the latest employment report showed that the unemployment rate including those who are underemployed and the discouraged who are not working full-time but want to is holding firm at 9.9%, remaining above pre-recession levels. This will be bullish for gold going forward as the market will now expect a lower probability of a rate hike in March, meaning interest-bearing assets will continue to deliver low returns. Hence, people will move their money into gold.

So will next week see a continuation of the bullish trend? If so, call options are suggested at the start of the week as the recent momentum suggests it will close higher by the end of the week. There are several events this week that could help to push gold higher. Firstly, on Wednesday the CB Leading Economic Index for December from China is due as well as the New Loans indicator. Both will give an indication of recent health of the Chinese economy and poor figures will be bullish for XAU-USD. The New Loans are forecast at 1,900 billion Yuan. The previous CB Leading Economic Index reading was 0.6% and gold bulls should look for a lower figure this time.

Also on Wednesday, the fed’s Janet Yellen will deliver a speech (15:00 GMT) where her comments could influence price action in XAU-USD. This is followed by comments from another Federal Open Market Committee member John C. Williams (18:30 GMT). If they take a dovish view and do not provide any indication of the timing of the second rate hike, then this will be interpreted as bullish for gold.

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