Gold price strengthens on softer job vacancies

By TradeRadius | Tue, 29 Aug 2023 15:24:54 UTC

img for post
  • Gold price recovers strongly to near $1,920.00 as pressure builds on US Dollar and Treasury yields.
  • Fed’s September policy action will be highly guided by August labor market data.
  • US Raimondo and China’s Wang Yi agree to launch a platform on export control information.

Gold price (XAU/USD) strengths as US firms invited applications for lower job openings in July. Fresh job vacancies in July were 8.827M against June’s reading of 9.165M while investors anticipated 9.465M openings. Weak job openings data indicate that the US labor market is losing its resilience.

Jerome Powell reiterated at the Jackson Hole Symposium that the central bank will remain data-dependent. Powell added that inflation has become more responsive to the labor market, so upcoming JOLTS and other job-market-related data later this week are set to be crucial to determining the Fed’s next steps.

US employment and ISM Manufacturing PMI data will remain on investors’ radar. The weightage of August labor market data is expected to remain high as it will provide a base for September’s interest rate decision. Investors hope that hiring momentum slows as US firms are banking on lower operating capacity due to a delicate economic outlook. Also, factory activity is expected to contract for the ninth straight month.

Daily Digest Market Movers: Gold price capitalizes on soft JOLTS Job Openings data

  • Gold price climbs perpendicularly to near $1,930.00 after the US Bureau of Labor Statistics posted weaker-than-anticipated JOLTS JOb Openings for July.
  • US firms invited fresh applications for 8.827M vacancies against June’s reading of 9.165M while investors anticipated 9.465M openings.
  • The recovery move in the Gold price is also backed by a subdued US Dollar and declining US Treasury Yields. The US Dollar Index (DXY) struggles to climb above 104.00, while 10-year US bond yields drop to near 4.18%.
  • The US Dollar comes under pressure as Fed Chair Jerome Powell reiterated at the Jackson Hole Symposium that further policy action will depend on economic data.
  • Jerome Powell kept doors open for further policy tightening as the achievement of price stability has a long way to go. Two months of lower inflation levels is just the beginning of what the central bank wants to build.
  • Cleveland Fed Bank President Loretta Mester supported one more interest rate hike in 2023 this week to ensure that the goal of price stability is achieved before 2026.
  • After the hawkish Powell commentary, investors shifted focus to the Automatic Data Processing (ADP) Employment Change data for August, which will be published on Wednesday at 12:15 GMT.
  • The central bank has evidence that inflation is getting more responsive to labor markets. Powell said that further signs of a tightening job market could warrant more Fed action.
  • Powell’s commentary about the job market has increased the significance of August employment data as it will provide a base for September’s monetary policy.
  • For the ADP data release, the US private sector is expected to have added 195K jobs in August, significantly lower than July’s reading of 324K.
  • Before US ADP Employment data, investors will focus on JOLTS Job Openings for July, which will be released at 14:00 GMT. As per estimates, US firms posted fresh 9.465M vacancies, lower than June’s job openings figure of 9.582M.
  • Apart from the labor market data, investors will also keep the ISM Manufacturing PMI data for August on their radar, which will be released on Friday.
  • US factory activity is expected to contract for a ninth consecutive month, according to estimates. The ISM Manufacturing PMI is seen at 47.0, slightly higher than July’s reading of 46.4. Still, a figure below the 50.0 threshold signals a contraction in activity.  The New Orders Index, a widely followed leading indicator, is expected to drop to 46.3 from 47.3.
  • On Monday, the Texas Manufacturing Outlook Survey reported that a key measure of state manufacturing conditions fell six points to -11.2, its lowest level since May 2020.
  • Investors are keenly focusing on US Commerce Secretary Gina Raimondo's visit to China. Raimondo said the administration is aware of challenges and optimistic about US-China ties.
  • Raimondo and China’s Foreign Minister Wang Yi agreed to launch a platform on export control information.

Technical Analysis: Gold price jumps vertically to near $1,930

Gold price climbs to near $1,930.00 as fresh job vacancies in June were significantly lower than anticipated. The precious metal climbs above the 20- and 200-day Exponential Moving Average (EMA), which indicates a solid recovery attempt. In spite of this revival move, the yellow metal has to pass through some more filters for a sustained reversal.

 

 

Share

Partners News

Team USA push for first gold medals as Olympic Games kick off

21m ago / 8:45 AM UTC Freddie Clayton For those who caught last night’s opening ceremony, you may have noticed the torrential rain pouring down on Paris. And due to the adverse weather, organizers have pushed back the men’s street skateboarding event originally scheduled to start this morn...

By TradeRadius | 22 Minutes Ago

> >

High housing costs hitting record highs, Harvard University report says

Economists predict mortgage rates will remain elevated for the rest of the year and will only begin to fall once the Federal Reserve starts cutting rates. The high cost of housing is making it hard for many Americans to make ends meet, and monthly rents are rising faster than wages, according t...

By TradeRadius | 1 Hours Ago

> >

Custom duty reduction impact: How gold prices may perform in near future

Government has slashed customs duties on gold and silver by 6 percent. The basic customs duty has been reduced to 5 percent from 10 percent, and the Agriculture Infrastructure and Development Cess lowered to 1 percent from 5 percent. This decision will effectively bring down the overall taxes...

By TradeRadius | 1 Hours Ago

> >

Job losses, protests present difficulties for Chinese Communist Party

Job losses and wage cuts from China's economic downturn are hitting key industries, according to the South China Morning Post, and analysts say the situation could lead to political difficulties for the ruling Chinese Communist Party (CCP).

By TradeRadius | 2 Hours Ago

> >

Kamala Harris campaign looks for ‘reset’ with crypto companies

Vice-president’s team aims to improve relations after industry criticism of the Biden administration

By TradeRadius | 2 Hours Ago

> >

Mirae Asset Mutual Fund withdraws temporary suspension in large & mid cap fund

Since the initial restriction in November 2020, which limited SIP investments to Rs 2,500 monthly (later increased to Rs 25,000 in October 2023), Indian equities have experienced substantial growth. The Nifty 50 Total Return Index (TRI) and Nifty Midcap 150 TRI have risen by approximately 1.2...

By TradeRadius | 2 Hours Ago

> >

How equity mutual funds have performed after the Budget?

Two small cap funds - Tata Small Cap Fund and LIC MF Small Cap Fund - offered 3.38% and 3.36% returns respectively in the last week. SBI Consumption Opportunities Fund delivered 3.17% return in the similar time frame.

By TradeRadius | 2 Hours Ago

> >

IPO Calendar: 8 IPOs, 11 listings investors need to watch out for next week

Apart from the above, the Street will see as many as 11 listings, all of which will debut on the SME platforms of respective exchanges. "Both domestic and global investors are showing significant interest in the Indian stock market, making it an attractive destination for investment. This...

By TradeRadius | 3 Hours Ago

> >

US reveals security concerns around TikTok and ByteDance

Department of Justice alleges sensitive American user data was stored in China

By TradeRadius | 3 Hours Ago

> >

Nifty Alpha Low - Volatility 30 ETF: A suitable pick for all investors

The portfolio largely comprises of large-cap companies which are often well-established and have a track record of success, making them less volatile than smaller companies. Additionally, large-cap stocks tend to weather economic downturns better than smaller companies, providing a level of...

By TradeRadius | 4 Hours Ago

> >