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Gold’s demand shaky as investors await Non-Farm Payroll report

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Gold started the London session today bearish as investors awaited the latest U.S. jobs report so as to get an indication as to what the U.S. Federal Reserve’s next policy move could be.

Gold futures is down 0.44%, currently trading at $1,814.15 an ounce. Although down, the yellow metal remains above the $1,800 trading zone.

Gold Investors are somewhat appeased by Fed Chairman Jerome Powell’s insistence that interest rate hikes are “ways away” as the Fed handed down its latest policy decision during the previous week. This pushed the yellow metal to a two-week peak above the $1,800 trading zone. However, Fed Governor Christopher Waller stated on Monday that the central bank could begin asset tapering by October 2021 if the next two U.S. jobs report each show employment rising by 800,000 to 1 million.

Asides from U.S reports, in the Asia Pacific, the Reserve Bank of Australia kept its interest rate unchanged at 0.10% as it handed down its policy decision earlier in the day, during the Asian session. The Bank of England and Reserve Bank of India will hand down their decisions on Thursday and Friday respectively.

What they are saying

IG Market analyst, Kyle Rhoda told Reuters that, “Every data point we get from here until the Fed’s Jackson Hole symposium will be crucial… there’s a lot of spare capacity in the labour market… if there’s the sense that the Fed will continue to keep policy settings accommodative medium to longer-term, that’s a really good dynamic for gold prices, especially if we see inflation expectations remain relatively elevated.”

Phillip Futures senior commodities manager, Avtar Sandu told Reuters that, “In less than a week, gold has gone from a potential breakout and breakdown candidate on the charts to a buy the dips, sell the rallies market… gold futures are practically moving along a flat 200-day EMA which is further indicative of a consolidating market.”

Bottomline

Investors should be on the edge of their sits as policy decisions are to be announced this week. Key decisions will be announced from the Bank of England on Thursday and the latest jobs report, including non-farm payrolls, will be released on Friday.

In other precious metals, silver is down 0.52%, currently trading at $25.44, platinum is down 0.77%, currently trading at $1,048.20 and palladium is down 0.18%, currently tradinat $2,679.25, as of the time of writing this report.

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