3 June, 2016
Market players kept their guards up as they await the US labor data report, a strong reading of which could urge the Federal Reserve to increase interest rates this month – a decision that would be bearish for non-interest bearing gold.
The yellow metal was little changed in the earlier session with the European Central Bank keeping its rates at their current level.
"A good jobs figure could help cement the case in investors' minds for a June or July Fed rate hike. This would likely weaken gold and the $1,200 an ounce level could be tested," a bank analyst stated. "A hard break may be only temporary as long term the outlook for gold is positive."
Spot gold closed the last trading session up $2.70 at $1,210.50 per ounce. The instrument fluctuated between $1,207.70 and $1,211.50 before the close.
“Tonight’s non-farm payrolls is the next key price sensitive economic release, which should keep traders relatively sidelined in the interim,” according to market experts.
Analysts estimate resistance at $1,220 and support at $1,200, explaining that if the support level is exceeded there will potentially be further stop-loss selling pressure, which would place $1,180 on the table.
A series of services PMI is due from Eurozone countries and the United States, as well as trade balance, ISM non-manufacturing PMI and factory orders later on Friday. However, the focus will be the US May payrolls report.
The US jobs data has improved significantly since the Federal Reserve announced that most of its members were getting more comfortable with a June interest rate increase.
Noting a growing labor market and indications of inflation, several Federal Reserve members stated that if positive data continued, interest rate normalization would be convenient.
Yet, only 21 percent of investors anticipate a rate increase in the upcoming weeks despite hawkish comments from the policy board, according to reports.
“Considering the resilience of the US economy, the perceived probability of a June rate increase of 20.6 percent is too low – although we do not believe the Fed will raise rates this month. We think that this will gradually rise ahead of the June 14-15 meeting, which should in turn exert downward pressure on gold,” a market analyst explained.
In a preview of the jobs data, the US ADP non-farm employment change for May was at 173,000, in line with estimates of 174,000. The official figure is seen to post nearly 160,000 jobs added in May.
The US economic growth has been sluggish in the first quarter, although not as strongly as initially expected, amid an increase in spending on home architecture and a constant increase in inventory investment by business...
Oil prices increased more than 1 percent on Monday after Goldman Sachs stated that the market has ended for nearly two years of oversupply subsequent to a global oil disruptions and a market deficit...
The Australian and New Zealand dollars rallied against the greenback on Wednesday, but gains were anticipated to stay capped by lower prices of crude oil...
World stock markets rallied on Tuesday, fueled by a strong corporate earnings in Europe, including improvements on Greek debt talks and Japan’s new pledge in preparation to a weaker currency...
Gold prices ticked higher as the greenback slid to 16-month lows during the session earlier. On the Comex division of the New York Mercantile Exchange, gold delivery for June rallied at $1,303.85 per troy ounce, advancing $6.55 or 0.51 percent...
Analysts forecast that Germany DAX would hit 0.06 percent higher when the market opens, while France’s CAC 40 was anticipated to remain steady. Meanwhile, UK markets are closed due to a public holiday.
Shares in the U.S. plummeted following the decline of the stocks in the Asian market as the Bank of Japan left the interest rate unchanged...
Wall Street futures dropped on Friday after the Dow issued its first decline of more than 1% in two months, while investors are closely watching on data...
International Energy Agency claimed that the oil prices would be stable again in 2017 as the non-OPEC oil producers were expected to limit their production this year...