Gold Ticks Lower as ADP Report Meets Forecast

Gold continues to lose ground this week. In Wednesday’s North American session, the spot price for an ounce of gold is $1264.42, down 0.14% on the day. On the release front, ADP Nonfarm Employment Change slowed to 190 thousand, just above the forecast of 189 thousand. On Thursday, the US releases unemployment claims.

The ADP nonfarm employment report came in as expected, with a gain of 190 thousand. Still, this was a soft reading compared to the previous release, which showed a gain of 235 thousand. Investors are, of course, much more interested in the official nonfarm employment change release, which takes place on Friday. Again, the markets are expecting a soft landing, with a forecast of 200 thousand, down from 261 thousand in the October release. If nonfarm payrolls, one of the most important indicators, is weaker than expected, the US dollar could lose ground. The US will also release a wage growth report on Friday, with the markets expecting a gain of 0.3%.

The markets are widely expecting the Federal Reserve to continue to raise rates in the near future, and this sentiment continues to weigh on gold prices. The odds on upcoming rate hikes continues to fluctuate. Currently, the CME has priced in December and January hikes at 90% and 88%, respectively. If the US economy continues to perform at its impressive pace into 2018, we could see the Fed raise rates up to three times next year.

XAU/USD Fundamentals

Wednesday (December 6)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 189K. Actual 190K
  • 8:30 US Revised Nonfarm Productivity. Estimate 3.3%. Actual 3.0%
  •  8:30 US Revised Unit Labor Costs. Estimate +0.2%. Actual -0.2%
  • 9:59 US IBD/TIPP Economic Optimism. Estimate 54.6. Actual 51.9
  • 10:30 US Crude Oil Inventories. Estimate -3.2M. Actual -5.6M

Thursday (December 7)

  • 8:30 US Unemployment Claims. Estimate 241K

*All release times are GMT

*Key events are in bold

XAU/USD for Wednesday, December 6, 2017

XAU/USD December 6 at 12:25 EST

Open: 1266.11 High: 1269.35 Low: 1262.66 Close: 1264.42

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1213 1240 1260 1285 1307 1337
  • XAU/USD ticked higher in the Asian session but retracted in European trade. The pair has posted small losses in the North American session
  • 1260 is a weak support line
  • 1285 is the next resistance line
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1240 and 1213
  • Above: 1285, 1307, 1337 and 1367

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged this week. Currently, long positions have a majority (72%), indicative of trader bias towards XAU/USD reversing directions and moving to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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