August Comex gold futures firmed in overnight action, supported by modest weakness in the U.S. dollar index. Also, new investment flows are pouring back into financial markets at the start of a new quarter. The S&P 500 is also stronger in pre-opening trade. The main even this week, however, will be Friday’s U.S. June employment report.
Financial markets have been jittery following recent statements by the U.S. Federal Reserve suggesting the central bank will reduce its stimulus program this year and could finish its asset buying program by mid 2014. Friday’s jobs data will be widely watched for confirmation that labor markets are stabilizing and/or improving and will be key for the U.S. dollar and in turn gold.
Credit Suisse forecasts a 150,000 increase in non-farm payrolls in June, while Nomura estimates a 155,000 jump in non-farm jobs. Credit Suisse also expects the overall unemployment rate to drop to 7.5%, while average hourly earnings are estimated at a 0.2% increase. Nomura, however, estimates the unemployment rate to remain steady at 7.6%.
Heavy selling pressures were seen last week in gold, due in part to quarter-end book squaring. Now, with those adjustments out of the way, the markets are ripe for fresh investment flows. Gold dipped briefly under the $1,200 mark, which also met the technical objective for the large triangle formation on the daily chart. Also, the $1,200 level is price level some gold mines point to as the number needed for profitability.
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Gold Is Oversold, Ripe For Bounce Higher
Published 07/03/2013, 05:09 AM
Updated 05/14/2017, 06:45 AM
Gold Is Oversold, Ripe For Bounce Higher
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