Gold turns green above $1320 following the initial reaction to NFP data

• Mixed labour market data from the U.S. cause sharp fluctuations in DXY.
• Wall Street opens mixed on Monday.
• Coming up: Markit and ISM Manufacturing PMI.

The XAU/USD pair dropped to $1317 after the data from the U.S. showed that the NFP in January increased by 304K to beat the market expectation of 165K. However, with other details of the report pointing out to some underlying weaknesses in the labour market, the pair quickly erased its gains and rose above the $1320 area. At the moment, the pair is up $1 on the day at $1323.

The U.S. Bureau of Labor Statistics revealed that the unemployment rate ticked up to 4% and the average hourly earnings in January grew by 0.1% on a monthly basis in January to fall short of the analysts' estimate of 0.3%. The US Dollar Index, which leapt to 95.60 in the first minute after the data release, was last down 0.1% on the day at 95.45.

Later in the session, both the ISM and the IHS Markit will be publishing their January Manufacturing PMI reports. Moreover, the UoM will release its Consumer Confidence data, which is expected to come in at 90.8 in January's final reading.

Meanwhile, major equity indexes in the U.S. started the day mixed on Friday with the Dow Jones Industrial Average adding 0.36% in the early trade and the Nasdaq Composite losing 0.35% to point to neutral market sentiment. 

Technical levels