Gold futures remain down but holding support above $1,750 as ADP says 568K jobs created in September

Gold future prices are under pressure but they continue to hold the line around $1,750 an ounce, even as more American’s found jobs last month, according to private payrolls processor ADP.

Wednesday, ADP said that 568,000 jobs were created in September, handily beating expectations; consensus forecasts were calling for job growth of around 425000.

The gold market was trading in negative territory ahead of the report and has seen little reaction to the latest employment data. December gold futures last traded at $1,757.90 an ounce, down 0.17% on the day.

Not only did the latest ADP numbers show robust growth in the labor market but the firm expects the pace of hiring to continue to pick up.

“Current bottlenecks in hiring should fade as the health conditions tied to the COVID-19 variant continue to improve, setting the stage for solid job gains in the coming months,” said Nela Richardson, chief economist at ADP.

According to some economists, the latest employment data does not bode well for the gold market as it provides the Federal Reserve an opportunity to follow through with its plans to reduce its monthly bond purchases by the end of the year. Healthy employment growth has been a critical target the central bank has been watching as it prepares to shift its monetary policies.

“It looks like the gain in employment will qualify as “decent”, which is the threshold Fed Chair Jerome Powell has suggested for pushed ahead with a QE tapering announcement at the late-November meeting,” said Paul Ashworth, chief U.S. economist at Capital Economics.

However, analysts also note that ADP is a poor predictor ahead of Friday’s official government data.

“The ADP report has a poor track record of predicting non-farm payrolls, particularly since the pandemic, but last month it did foreshadow a soft reading. Whether that’s luck or whether that’s improved tracking is something we’ll find out on Friday but I don’t think anyone is putting too much stock in ADP at the moment,” said Adam Button, chief currency strategist at Forexlive.com

Must Read

error: Content is protected !!