Gold price (XAU/USD) consolidates near a six-day low and remains exposed to more falls as investors keep funding the US Dollar due to an infirm global
by the Federal Reserve , which will be announced on September 20. Meanwhile, investors await Q2 US Unit Labor Costs data, which will be published at 12:30 GMT.struggling due to tight monetary policy and high inflationary pressures and China facing deflation risks, the US economy remains resilient.
Also, the New Orders Index of the Services PMI rose significantly to 57.5 against the 55.0 figure recorded in July, indicating that the demand outlook for the services sector is upbeat. About the interest rate outlook, Boston Fed President Susan Collins said that further action will be based on incoming data. Collins expects a slowdown in the coming months and said that the central bank is far from containing inflation.
Investors shift their focus towards the April-June quarter Unit Labor Costs data, which will be published at 12:30 GMT. Labor costs are expected to have increased by 1.6%, the same pace as in the first quarter. A higher-than-expected reading would demonstrate decent wage growth, which would elevate inflationary pressures.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar as it makes the US a more attractive place for international investors to park their money.
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