Price of Gold Fundamental Daily Forecast – Prices Capped as Weekly Jobless Claims Match Expectations
Gold futures are trading flat on Thursday following a volatile session the day before. The price action suggests the major players are sitting on the sidelines ahead of Friday’s U.S. Non-Farm Payrolls report that could set the trend in the market over the next several months.
Wednesday’s spike to the upside then subsequent sell-off was a reflection of thin trading conditions. Without a major stopper in the market, prices jumped but then fell back to unchanged-to-lower when a major buyer failed to show up to support the move. The whipsaw action highlighted the risk in trading off the headlines during a low-volume period and meant very little to the overall trend.
At 12:51 GMT, December Comex gold futures are trading $1813.80, down $0.70 or -0.04%. This is well-off yesterday’s intraday high of $1835.90.
We’ve said for over a week that since the Federal Reserve isn’t scheduled to meet until September 21-22, traders are going to react more aggressively to U.S. economic reports and Fed speaker comments in order to generate some price action. This notion was supported on Wednesday when the price spike was triggered by weaker-than-expected ADP jobs data in the United States. Prices then plunged after strong U.S. services industry activity data and hawkish remarks from Fed Vice Chair Richard Clarida on interest rates.
The pattern and price action could repeat on Friday with the release of the July U.S. Non-Farm Payrolls report.
Daily Forecast
Gold was under pressure on Thursday as Treasury yields and the U.S. Dollar rose as investors sorted through more labor market indicators ahead of Friday’s major jobs report.
Weekly initial jobless claims came in at 385,000 on Thursday, according to the Labor Department, matching expectations.
Gold investors have been closely monitoring jobs data, given that the labor market recovery is being used by the Federal Reserve to gauge when it will start talking about tightening monetary policy.
The Labor Department’s official July jobs report, due out on Friday, will be the core focus for investors this week.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
