Gold steady as investors eye nonfarm payrolls, wage growth

Gold has posted slight gains in the Thursday session, continuing the trend seen on Wednesday. In North American trade, the spot price for one ounce of gold is $1198.43, up 0.20% on the day. On the release front, unemployment claims dropped to 203 thousand, beating the estimate of 214 thousand. However, ADP Nonfarm Payrolls disappointed with a reading of 163 thousand. This was well below the forecast of 195 thousand. In the services sector, ISM Non-Manufacturing PMI climbed to 58.5, above the estimate of 56.8 points. On Friday, the U.S releases three key employment indicators – nonfarm payrolls, wage growth and the unemployment rate.

The U.S economy continues to perform well and the labor market remains at full capacity. Surprisingly, ADP nonfarm payrolls posted a sharp drop in August, falling to 163 thousand. This was the smallest gain since September 2017. Will the official non-farm payrolls follow suit with a soft reading? There was better news from unemployment claims, which dropped to 203 thousand, the lowest number since 1969. However, analysts pointed out that some states had estimated unemployment claims, due to the Labor Day holiday, which may have led to an exaggeration in the decline.

Emerging markets continue to struggle, as nations such as Turkey, Argentina and Indonesia are experiencing major declines in their currencies against the U.S dollar. This has triggered heavy losses in emerging equity markets, and fears that this could hamper global growth are weighing on European and North American markets as well. If the sell-off in the emerging markets continue to spiral downwards, the U.S dollar could gain more ground.

XAU/USD Fundamentals

Thursday (September 6)

• 7:30 US Challenger Job Cuts. Actual 13.7%
• 8:15 US ADP Nonfarm Employment Change. Estimate 195K. Actual 163K
• 8:30 US Unemployment Claims. Estimate 214K. Actual 203K
• 8:30 US Revised Nonfarm Productivity. Estimate 2.9%. Actual 2.9%
• 8:30 US Revised Unit Labor Costs. Estimate -0.9%. Actual -1.0%
• 9:45 US Final Services PMI. Estimate 55.2. Actual 54.8
• 10:00 US ISM Non-Manufacturing PMI. Estimate 56.8. Actual 58.5
• 10:00 US FOMC Member John Williams Speaks
• 10:00 US Factory Orders. Estimate -0.5%. Actual -0.8%
• 10:30 US Natural Gas Storage. Estimate 60B
• 11:00 US Crude Oil Inventories. Estimate -2.2M

Friday (September 7)

• 8:30 US Average Hourly Earnings. Estimate 0.2%
• 8:30 US Nonfarm Employment Change. Estimate 193K
• 8:30 US Unemployment Rate. Estimate 3.8%

*All release times are DST

*Key events are in bold

XAU/USD for Thursday, September 6, 2018

XAU/USD September 6 at 12:40 DST

Open: 1195.96 High: 1207.06 Low: 1195.90 Close: 1198.43

XAU/USD Technical

XAU/USD edged higher in the Asian session. The pair moved higher in European trade but gave up these gains in the North American session

• 1170 is providing support
• 1204 was tested earlier in resistance
• Current range: 1170 to 1204

Further levels in both directions:

• Below: 1170, 1146 and 1115
• Above: 1204, 1220, 1236 and 1261

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.