Gold Price: Rally Stalls Ahead of US Jobs Report, Fed Speak
Gold, NFPs and Federal Reserve Speakers:
- US NFPs may surprise to the upside.
- Fed Chairs, past and present, talk at AEA roundtable.
Gold Waiting for the Next US Dollar Move
Gold is stuck in a holding pattern as the market awaits the latest US Labour Report (NFPs) and commentary from Fed chair Powell and two of his predecessors. Yesterday’s ADP employment data jumped – 271k against expectations of 180k – and while not a direct correlation to US NFPs, a beat to the upside today – expectations of +180k – cannot be ruled out. Of equal importance in today’s Labour Report, the average hourly earnings figure is expected to tick up to 0.3% m/m in December from a prior 0.2%. Any upside beat of these two sets of figures will boost a currently flagging US dollar, putting downward pressure on gold.
Later in the session, Fed chair Jerome Powell will attend a roundtable event at the American Economic Association (AEA), along with predecessors Ben Bernanke and Janet Yellen. The markets will be looking for Powell’s – and his predecessors - latest thoughts on the state of the US economy, especially after interest rate hikes expectations were pared back at the December Fed meeting.
Gold touched a fresh six-month high today around $1,297/oz. in Asian trade before slipping lower as Europe came in. The precious metal has rallied just over $80/oz. in the last five weeks, pushing the precious metal into overbought territory, using the RSI indicator. To the upside $1,310/oz. ahead of 23.6% Fibonacci retracement at $1,308/oz. while to the downside 38.2% Fibonacci retracement at $1,727/oz. and the 20-day moving average at $1,263/oz.
Gold Daily Price Chart (April 2018 – January 4, 2019)
Retail traders are 73.3% net-long US Crude according to the latest IC Client Sentiment Data, a bearish contrarian indicator. However, recent changes in daily and weekly positions suggest that prices may soon reverse higher.