Gold Edges Higher as ADP Nonfarm Payrolls Misses Expectations

Gold has posted slight gains in the Wednesday session. In North American trade, spot gold is trading at $1271.84, up 0.24% on the day. On the release front, ADP Nonfarm Employment Change rebounded with a reading of 178 thousand, but this was short of the forecast of 187 thousand. Thursday will be busy, as the US releases two key events – unemployment claims and ISM Non-Manufacturing PMI. On Friday, we’ll get a look at Nonfarm Employment Change, which should be treated as a market-mover. The indicator is expected to slow to 181 thousand, compared to 222 thousand a month earlier.

Gold enjoyed a good month of July, as XAU/USD jumped 2.0%. The US dollar has softened, and even a solid Advance GDP last week failed to stem the greenback’s slide. The first GDP report for the second quarter came in at impressive 2.6%, beating the estimate of 2.5%. This strong expansion should put to rest concerns of a second straight quarter of weak growth – Final GDP came in at just 1.4%. Still, EUR/USD soared in July, gaining 3.5%. Investors remain concerned that low inflation in the US could mean that the Fed will balk and not raise interest rates in December, despite all but promising to increase rates three times in 2017. In June, Fed Chair Janet Yellen dismissed low inflation as “transient”, but she has since changed her tune, as economists remain at a loss to explain why a red-hot economy has not translated into stronger wage growth, and hence higher inflation. The markets are skeptical about a December hike, with the odds at just 42%, according to the CME Group.

USD/XAU Fundamentals

Wednesday (August 2)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 187K. Actual 178K
  • 10:30 US Crude Oil Inventories. Estimate -3.2M. Actual -1.5M

Thursday (August 3)

  • 8:30 US Unemployment Claims. Estimate 242K
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 56.9

*All release times are EDT

*Key events are in bold

XAU/USD for Wednesday, August 2, 2017

XAU/USD August 2 at 12:20 EST

Open: 1268.83 High: 1271.96 Low: 1263.00 Close: 1271.84

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1232 1260 1285 1307 1337
  • XAU/USD edged lower in the Asian session. The pair showed little movement in European trade and has edged higher in the North American session
  • 1260 is providing support
  • 1285 is the next resistance line
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1232, 1199 and 1170
  • Above: 1285, 1307 and 1337

OANDA’s Open Positions Ratio

In the Wednesday session, XAU/USD ratio is showing long positions with a majority (64%), indicative of XAU/USD continuing to move higher.

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Kenny Fisher

Kenny Fisher

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