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July 2nd - Following the release of the latest U.S. government jobs data, markets on Thursday bet that the case for a Federal Reserve rate hike later this month has significantly weakened due to a marked slowdown in job growth. The closely watched jobs report released Thursday by the Bureau of Labor Statistics showed that nonfarm payrolls increased by 57,000 in June. This was roughly half of economists expectations. Mays job growth was revised down to 129,000 from the initially reported 172,000. Seema Shah, chief global strategist at Principal Asset Management, wrote, "The slowdown in job growth challenges expectations of a labor market recovery in recent months, but more importantly, it reinforces the view that the Fed faces little pressure to tighten policy." Short-term interest rate futures traders now believe the probability of a July rate hike has fallen below 20%, but still see a higher probability of a September rate hike.July 2nd - Weaker-than-expected US non-farm payroll data boosted gold prices, which rose 2% after a slight dip ahead of the report. Data from the US Bureau of Labor Statistics showed that only 57,000 non-farm jobs were added in June, below analysts forecasts of 115,000. This unexpected data drove up stock and commodity prices, easing market concerns about future interest rate hikes. Comments from Federal Reserve Chairman Warsh also mitigated market anxieties about interest rates. Silver, the most actively traded commodity, also rose, gaining 4%.Russias central banks gold and foreign exchange reserves totaled $715.2 billion for the week ending June 30, compared with $743.8 billion in the previous week.July 2nd - Initial jobless claims in the U.S. fell slightly last week as businesses continued to avoid large-scale layoffs. The U.S. Labor Department reported on Thursday that initial jobless claims for the week ending June 27 were 215,000, lower than the market expectation of 220,000 and the previous weeks report of 216,000. Continuing jobless claims for the week ending June 20 were 1.814 million. According to the latest employment report released by the U.S. Labor Department, the U.S. added 57,000 jobs in June. However, given the relatively low number of recent jobless claims, it indicates that businesses are not laying off workers at an alarming pace.Federal Reserves Daly: We dont want to rush into a response in a rapidly changing world.

Before the US PMI is released, the gold price is expected to rise beyond $1,740 per ounce

Daniel Rogers

Aug 23, 2022 14:48

 截屏2022-08-22 下午5.31.01_1024x576.png

 

On the back of conflicting forecasts for US Purchasing Managers Index (PMI) data, the gold price (XAU/USD) is trying to break above $1,740.00. A new monthly low of $1,727.85 was recorded for the precious metal on Monday, but it has since rallied strongly. Given the lack of impetus in the upward trend, the gold price is likely to stay volatile. However, a pullback may be less profitable.

 

The consensus for the S&P Global Manufacturing PMI is 51.5, which is down from the prior reading of 52.2. When compared to its previous reading of 47.3, the Services PMI has room to grow.

 

The yellow metal has been supported by the disappointing early estimates of US Durable Goods Orders. From a previous release of 2%, the market expects the economic figures to sharply decrease to 0.5%. It's important to note that the most recent reading showed no change in underlying pricing pressures, which stood at 5.9%. So, we expect to see little change, if any, in the Durable Goods Orders numbers. Unfortunately, a precipitous drop in economic statistics portends a precipitous drop in demand.

 

The other thing that will be in the spotlight is Federal Reserve (Fed) chair Jerome Powell's remarks from the Jackson Hole Economic Symposium. US economic conditions and Fed Powell's direction on inflationary pressures and interest rates will be determined by him.

 

Gold prices on an hourly scale are looking to continue their recovery after breaking above the $1,729.44 61.8% Fibonacci retracement (set from the low of $1,680.91 on July 21 to the high of $1,807.93 on August 10). Gold has been testing the resistance of the 20-period Exponential Moving Average (EMA) around $1,738.00; a sustained move above this level would signal a change in trend toward the bullish side.

 

Furthermore, the Relative Strength Index (14), which had been negative in the 20.00-40.00 range, has moved into the bullish 40.00-60.00 zone, indicating that gold prices are currently not bearish.

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