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(Kitco News) – Gold market holds near session highs after labor market data shows private sector increased fewer workers than expected in July, according to latest payroll processor report private ADP.
On Wednesday, ADP said 330,000 jobs were created last month, which is well below expectations; consensus forecasts were for job growth of around 695,000.
The gold market saw some buying momentum ahead of the report and pushed back to session highs in initial reaction to disappointing jobs numbers. December gold futures last traded at $ 1,829 an ounce, up 0.81% on the day.
Although the precious metal has seen a modest increase thanks to the latest employment data, the market is still caught in its current trading channel with resistance to the 200 day moving average, which stands at 1,832.60 $ per ounce. Analysts said the gold market must overcome this hurdle to attract new capital.
Investors and markets are sensitive to the jobs data, as the health of the labor market is a significant issue the Federal Reserve is monitoring and could determine the pace of tightening.
The gold market held up. Investors are reluctant to take a large position as the Federal Reserve seeks more information.
According to some economists, the latest ADP data creates a downside risk for Friday’s official report on non-farm wages. However, private sector employment data was never a consistent predictor of Friday’s government numbers.
According to consensus forecasts, economists expect 870,000 jobs to be created in July. Some central bank officials have said that strong employment data in July and August could prompt the Federal Reserve to reduce its monthly bond purchases by the end of the year.
Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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