Gold Steady Near $1,845 – US ADP NFP in Focus
The gold price is flat in the session so far, at $1848.13, as markets consolidate the rise in the greenback, which climbed higher due to a
The gold price is flat in the session so far, at $1848.13, as markets consolidate the rise in the greenback, which climbed higher due to a bid in US Treasury yields as global inflation fears flared up again. GOLD prices rose from a two-week low on Wednesday as investors sought refuge in the safe-haven metal amid concerns about rising inflation, though a stronger dollar limited the yellow metal’s daily gains.
While bullion is regarded as an inflation hedge and a safe haven during economic uncertainty, higher interest rates, on the other hand, raise the opportunity cost of holding gold and strengthen the dollar. Stocks fell broadly on concerns about aggressive tightening risks, putting the risk sentiment on edge. Overnight, Asian exchanges traded choppy, while European bourses fell on the continent. In the United States, the dollar index DXY, which compares the currency to six major peers, rose to 102.71 and then fell back, extending Tuesday’s gains. As a result, stocks in the United States fell as strong data on US manufacturing, and job openings reinforced the need for assertive Fed funds rate hikes.
The manufacturing index of the Institute for Supply Management unexpectedly rose in May, rising to 56.1 from 55.4 in April. As a result, despite all of the indexes opening the session in the green, the Dow Jones Industrial Average fell 0.5 percent to 32,813.23, the S&P 500 fell 0.8 percent to 4,101.23, and the Nasdaq Composite fell 0.7 percent to 11,994.46. The 10-year US Treasury yield rose 9.3 basis points to 2.937 percent. As a result, despite the threat of further rate hikes, the gold price has gained a safe-haven bid.
ADP Non-Farm Employment Change
Later today, investors’ major focus will be on the US ADP Non-farm payroll figures. In April 2022, private businesses in the United States hired 247K workers, the fewest since April 2020 and far below forecasts of 395K. The services sector added 202,00 jobs, primarily in leisure and hospitality (77,00), professional and business (50,00), and education and health (48,00). Meanwhile, the goods-producing industry added 46K jobs, primarily in manufacturing (25K) and construction (25K) (16K).
“The labor market recovery slowed in April as the economy approached full employment.” While hiring demand remains high, labor supply constraints have slowed job growth for goods producers and service providers. As the labor market tightens, small businesses with fewer than 50 employees face wage competition as costs rise,” said Nela Richardson, ADP’s chief economist.
Gold Technical Outlook
On Thursday, the technical outlook continued to be unchanged. The precious metal gold price opened today’s trading with a new rise after leaning on the 1850.00 level to resume the bullish wave that targets testing 1890.00 as the next main station, backed up by stochastic and the EMA50 positivity.
As a result, we anticipate a more bullish bias today, noting that a break of 1850.00 followed by 1838.10 levels will halt the expected rise and pressure the price to fall again. Today’s trading range is expected to be between 1845.00 support and 1880.00 resistance. Good luck!
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