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

Hiring stays strong for low earners, Vanguard finds

Labor demand for lower earners has been resilient while it has waned for higher-paying jobs, according to a new analysis.

By TradeRadius | 2 Minutes Ago

> >

Clorox and these other stocks are on the verge of marking a death cross chart pattern

Watch these stocks that may be poised for a pullback as they near a worrying chart pattern.

By TradeRadius | 7 Minutes Ago

> >

How to know if you need a financial advisor — and what kind to get

IE 11 is not supported. For an optimal experience visit our site on another browser. May 30, 202405:17 Now Playing How to know if you need a financial advisor — and what kind to get 05:17 UP NEXT Value wars: Walgreens is latest retailer set to lower prices 02:37

By TradeRadius | 10 Minutes Ago

> >

S&P 500: Dip-Buying Opportunity or Trap?

Stock prices declined on Wednesday, with the closing 0.74% lower after breaking below the 4,300 level again. The market retraced its Tuesday rebound, ending the day near last week’s local low of around 4,257.

By TradeRadius | 10 Minutes Ago

> >

USD/TRY Forecast: Improved Economic Outlook - 30 May 2024

Bullish Entry Points: Bearish Entry Points: The USD/TRY pair has maintained stability throughout this month's trading. The lira has seen narrow movements throughout May, leading some analysts to expect the Central Bank of Turkey to control the exchange rate of the local currency in a maneuver...

By TradeRadius | 10 Minutes Ago

> >

GBP/USD Analysis: Profit-Taking Pressures Exposure - 30 May 2024

However, the delay in BOE rate cuts is limiting the downside. Despite the UK's annual inflation rate easing to 2.3%, approaching the bank's 2% target, the reading came in above expectations of 2.1%. Now, investors favor the first BOE rate cut in September rather than the previous June...

By TradeRadius | 10 Minutes Ago

> >

USD/JPY Analysis: Uptrend Remains Strong - 30 May 2024

Earlier this week, Bank of Japan board member Seiji Adachi indicated that the central bank might raise interest rates if the sharp decline in the yen leads to further inflation. USD/JPY is approaching the intervention zone as it rises above the 157.00 level. Will we witness a retest of the...

By TradeRadius | 10 Minutes Ago

> >

The Energy Report: Punching Bowl

Take away the punch bowl just as the party is getting started! Fed Officials did not like the Memorial Day price explosion in the commodity complex and did their best to cool off expectations by threatening an interest rate hike to spoil the party. Minneapolis Fed President Neel Kashkari put it...

By TradeRadius | 10 Minutes Ago

> >

Prop Trading in the US: A Side-by-Side Review of How Higher Leverage Attracts Traders

The world of prop trading has taken the US by storm, offering retail investors the opportunity to manage substantial capital with a small upfront fee. Despite recent controversies and market turmoil, prop firms continue to attract hundreds of thousands of clients. But what does their offering...

By TradeRadius | 12 Minutes Ago

> >

Broadridge Expands Digital Distribution with AdvisorTarget Acquisition

Broadridge Financial Solutions, Inc. has announced its acquisition of AdvisorTarget, a company known for providing asset management and wealth management firms with data products aimed at enhancing digital marketing, sales, and engagement programs targeting financial advisors. Offering Global...

By TradeRadius | 12 Minutes Ago

> >