Price of Gold Fundamental Daily Forecast – Gold Edges Lower after Strong ADP Employment Data

Gold futures are trading nearly flat shortly before the release of a series of key U.S. economic reports on Wednesday that could dictate the tone of the market for the rest of the session. Bullish data could drive U.S. Treasury yields higher on the notion that it would encourage the Federal Reserve to start discussing tapering its bond purchases.

At 12:00 GMT, June Comex gold futures are trading $1777.30, up $1.30 or +0.07%.

Capping prices are hawkish comments from U.S. Treasury Secretary Janet Yellen on Tuesday. Yellen said rate hikes may be needed to stop the economy from overheating as President Joe Biden’s spending plans boost growth, the comment drove prices down from a two-month high.

Gold prices began to stabilize after Yellen downplayed her earlier comments, saying she sees no inflation problem brewing.

US Economic Reports

April’s ADP Employment Change data, which tracks the growth of private payrolls, is due to be published at 12:15 GMT on Wednesday.

Economists polled by Dow Jones are expecting 800,000 private jobs added in April, compared to the 517,000 in March, according to the 517,000 in March, according to ADP. These number come ahead of Friday’s closely-watched jobs report.

The report showed the U.S. added 742,000 private payrolls in April. Gold prices remained flat after the news.

The final Markit purchasing managers’ index (PMI) for April is set to be released at 13:45 GMT, followed by the ISM non-manufacturing PMI for last month at 14:00 GMT.

Daily Forecast

If the economic reports don’t move gold prices then comments from Chicago Federal Reserve Bank President Charles Evans could.

A month ago, Evans said that while he’s become much more positive about the economic outlook, he continues to expect the U.S. central bank will need to keep policy easy for some time in order to boost inflation to healthier levels.

“Some even higher rates of inflation are needed to get inflation to average 2 percent and to solidify inflation expectations about that number” Evans said. “So, I see the need for continued accommodative monetary policy to reach our goals.”

Gold traders will be eyeing Evans to see if he maintains his stance, or if he has turned a little hawkish. If Evans sees the need for the Fed to become less-accommodative then yields could rise and gold prices fall.

For a look at all of today’s economic events, check out our economic calendar.