Gold Little Changed after Positive US Employment Report

Gold has posted small losses on Wednesday as metal industries at a price of $ 1,358.23 cash per ounce in the North American session. On the front release, ADP Nonfarm Payrolls improved to 179,000, exceeding the estimate. ISM non-manufacturing PMI stood at 55.5, below expectations. On Thursday, US releases jobless claims with the estimate standing at 265,000.

Gold prices remain at high levels, as the soft US GDP report has weighed on the US dollar. Preliminary GDP for the second quarter disappointed, as markets had expected a strong gain of 2.6%, while the economy responded with a much smaller gain of 1.2%. On Wednesday, the US releases were a mixed bag. July employment figures started on the right foot, as ADP Nonfarm Payrolls improved to 179,000, beating the estimate of 171,000. However, the ISM non-manufacturing PMI disappointed, as the index fell to 55.5 points, missing the estimate of 56.0 points. On Thursday, we will take a look at unemployment claims, followed by non-farm payrolls important on Thursday. strong readings could renew speculation of a rate hike in September. Market sentiment has deteriorated in the US dollar since the GDP report last week, since the gain of 1.2% was well below the forecast of an increase of 2.6%. Markets have turned September and December as the most likely date for rate hike, but if the Fed is not satisfied with the performance of the economy, which could delay any move until 2017.

Interest rates are closely linked to the movement of gold because the metal tends to rise when rates are reduced. This means that traders should be prepared for possible volatility on Thursday as the Bank of England meets for a political meeting. The Bank of England is expected to cut interest rates in order to dampen the aftermath of Brexit. The Bank of England surprised markets in July when rates stood at 0.50%, but faces losing its credibility if it stays out again. The bank has not lowered rates since 2009, so despite a rate cut has been priced in, such a drastic measure could shake markets and give gold prices a boost.

/ USD XAU Basics
On Wednesday (August 3)

8:15 ADP Non-Farm Employment Change. 171K estimate. Real 179K
10:00 ISM non-manufacturing PMI. 56.0 estimate. 55.5 reais
9:45 Final Services PMI US. 51.0 estimate. 51.4 reais
10:00 ISM non-manufacturing PMI. 56.0 estimate. 55.5 reais
10:30 oil inventories US. -1.6M Estimate. Real + 1.4M
Thursday (August 4)

8:30 jobless claims US. 265K estimate
* Key Announcements are highlighted in bold
* All times are EDT release

XAU / USD on Wednesday August 3, 2016