Price of Gold Fundamental Daily Forecast – Strong ADP Jobs Data Adds to Intraday Selling Pressure

Gold futures are trading lower shortly after the regular session opening following surge to a seven year high earlier in the session. Prices jumped past $1600 for the first time since 2013 after Iran conducted retaliatory attacks against U.S. forces in Iraq.

Gold prices began to retreat after an Iranian official’s tweet suggested this attack was the retaliation that traders had been waiting for in response to an American airstrike on Friday that killed a high-ranking Iranian military official.

At 13:34 GMT, February Comex gold is trading $1572.60, down $1.70 or -0.09%. Earlier in the session, gold prices hit $1613.30.

Gold hit its top at just about the same time the major U.S. stock index futures were hitting their bottoms and staring to claw back losses. The moves came shortly after a pair of tweets from the Iranian Foreign Minister and the U.S. President.

Iranian Foreign Minister Mohamad Javad Zarif said via Twitter that “we do not seek escalation or war, but will defend ourselves against any aggression.”

U.S. President Donald Trump tweeted, “All is well!” He also added that an assessment of casualties was taking place.

In other news, gold prices retreated further after a report showed that private payroll growth ended 2019 on a strong note, with companies adding 202,000 positions in December in another sign of a healthy labor market, according to ADP and Moody’s Analytics.

The total came in well above the 150,000 consensus estimate from economists surveyed by Dow Jones and sets the stage for the government’s official count that will be released Friday. Economists expect the Labor Department’s tally to show a gain of 160,000.

In addition, to the solid December growth, ADP revised the initial November count of 67,000 up to 124,000.

Daily Forecast

Gold traders should continue to expect heightened volatility in either direction. Traders are hoping President Trump provides more clarity when he addresses the nation at about 14:00 GMT on Wednesday. This speech could set the tone in the gold market for the rest of the session.

CNBC writes that “The reassuring tone of Trump’s tweet marked an unexpected shift away from the harsh rhetoric the president has used in recent days to characterize tensions with Iran, which escalated following a U.S. strike that killed Iranian General Qasem Soleimani. Given this assessment, gold traders have to be prepared for a two-sided response by market participants.

Ultimately, the direction of gold will be determined by whether President Trump encourages “Risk-On, or “Risk-Off.