Gold Focus on NFP; Ready to Close Seventh Positive Week in a Row

The metal is consolidating levels between 1,410 and 1,425 as the unit remains slightly bullish, but a firm dollar is holding the metal at current levels. All focuses are now in the employment report.
Mauricio Carrillo
Gold focus on NFP; ready to close seventh positive week in a row
Gold focus on NFP; ready to close seventh positive week in a row

Gold is trading sideways on Friday ahead of the NFP data later on the day. Investors are watching NFP and wages to confirm Fed’s intention to cut 25-basis points in interest rates.

Non-farm payrolls Expectations

The United States is expected to have created 165K new jobs in June. An acceleration from the 75K posted in May. Average hourly earnings are forecasted at a 3.2% increase, while the unemployment rate would remain at 3.6%.

Gold focus on NFP and wages reports

XAUUSD daily chart July 5

Gold is trading flat on the day as investors are waiting for the news to confirm a possible rate cut by the Fed in its next meeting. XAU/USD is ready to close its seventh positive week in a row.

The metal is consolidating levels between 1,410 and 1,425 as the unit remains slightly bullish, but a firm dollar is holding the metal at current levels. All focuses are now in the employment report.

FX Empire analyst James Hyerczyk highlighted in a recent article that market is expecting a slightly weak job report for a confirmation of a 25-basis point rate cut by the Fed.

“A steady-to-slightly weaker jobs report is likely already priced into the market.” Hyerczyk said. “A big miss by the report could put a 50-basis point rate cut back on the table. This could be bullish for gold prices.”

If that happens, 1,440 would be the level to watch in the form of resistance as it has contained the metal twice in the last two weeks.

However, Julius Baer analyst Carsten Menke is considering how far gold went earlier in the week and its behavior right now. “Gold market still has to adjust to the rapid rally we saw at the beginning of the week when prices shot back above $1,400 per ounce,” Menke said in a recent note to clients quoted by CNBC.

“Which in my view was driven by more positive sentiment in the gold market rather than any fundamental developments,” Menke concluded.

Metals report for July 5, 2019

Silver is trading negative for the third day as the unit is extending its rejection of the 15.45 area performed on July 3. The unit is now testing the 15.20 level just ahead of the non-farm payrolls data.

Copper is accelerating its decline after performing a bearish candle on Thursday. XCU/USD is now 0.92% negative at 2.6510 after trading as low as 2.6450.

Palladium is consolidating levels at 1,570, near to highs since March 26 at 1,575. Technical indicators suggest more consolidation and slightly bearish trend for the short term. Platinum is down for the second day on Friday with the unit testing the 830.00 area.

As a matter of context, the Dollar index is attacking the 97.00 level as the unit jumped to break above the 96.85 level it has been testing in the whole week. DXY is currently 0.22% positive on the day at 96.93.

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