Gold Flattish Ahead of US Labor Data

06 / 07 / 2018
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The bullion was seen trading flattish on Friday and was hovering around 1,255 USD during the London session, with more volatility expected later in the day.

The US non-farm payrolls is expected to stay strong, also a bit lower than in May. Investors forecast 195,000 new jobs in June, down from 223,000 in May. The unemployment rate is seen staying at 3.8%, while wage growth will most likely tick higher to 2.8% year-on-year. Strong numbers could cause another wave of gold selling.

On Thursday, the ADP employment report for June slowed marginally from 189,000 to 177,000 new jobs, but the services ISM survey rose from 58.6 to 59.1, despite analysts expecting a drop to 58.3.

Gold managed to stage a small relief rally in the previous days as investors exited some of their shorts and dollar eased. However, the price is still below the 1,262 – 1,265 USD zone and therefore the immediate trend still looks bearish.

On the downside, supports are at 1,250 USD and if not held, further weakness toward the current cycle lows at 1,240 USD could occur.

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