Gold At Highs
Gold prices are trading just below record highs today as traders await the latest NFP data. Across the week, softer-than-forecast JOLTS job openings and ADP labour market data have kept the US Dollar pressured lower, keeping gold supported. If today’s NDP data comes in below forecasts too, this should amplify the current dynamic, creating deeper pressure on USD and allowing gold room to breakout. A heavy downside surprise at the start of August was responsible for the widespread volatility we saw across markets as US recessionary fears took centre stage. Looking ahead today, traders are braced for fresh volatility should data once again undershoot forecasts.
NFP Forecasts
On the numbers front, the market is looking for the headline NFP reading to print 164k from 144k prior. The unemployment rate is forecast to tick down to 4.2% from 4.3% while wage growth is set to rise to 0.3% from 0.3% prior. Given the wide band between the prior NFP result and the forecast for today, there is plenty of room for data to fall short, particularly given the weak ADP print this week (99k vs 144k expected). If seen, this will put fresh focus on US recessionary fears, sending USD down and creating room for gold to push to new highs.
Technical Views
Gold
The rally in gold has stalled for now into the upper channel resistance line and the 2,530.59 level. With momentum studies bullish, focus remains on further upside and a fresh breakout while price holds above 2,483.27. Below there, 2,427.54 will be next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.