Gold prices attempted to move higher on Wednesday but were rejected at higher levels. The initial surge came following the softer than expected U.S. ADP private payrolls report that showed fewer jobs created during July. The number was countered by the stronger than expected ISM services report which buoyed yields. The greenback moved higher as yields rose, which seemed counterintuitive. This comes ahead of Friday’s government employment report, which is scheduled to be released by the Department of Labor.
Gold prices moved sideways but attempted to move higher early on Wednesday but were rejected strongly. Prices came off after the initial reaction to the weaker than expected U.S. labor report. Support is seen near the 10-day moving average at 1,809. Resistance is seen near the July highs at 1,834. Momentum is neutral as the fast stochastic continues to flip-flop and generate buy and sell signals. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a downward sloping trajectory which points to consolidation.
Jobs Data Disappoints
According to ADP, Private payrolls (non-government jobs) tumbled in July as fears mounted over the spreading Covid-19 delta variant. Employers added 330,000 positions for the month, a sharp deceleration of 680,000 in June. The number was well below the 653,000 estimates. June’s final total fell from the initial estimate of 692,000.