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The gold market jumped higher with prices well above $1 400 an ounce after private sector employment grew less than expected in June, according to private payrolls company ADP.
Yesterday, ADP said that 102 000 jobs were created in June, missing expectations; consensus forecasts were calling for job growth of 140 000. Private sector employment has come in weaker than expected four out of the last five months.
Gold prices were showing strong gains ahead of the report and spiked higher in initial reaction. August gold futures last traded at $1 424.10 an ounce, up more than 1 percent on the day.
The weaker-than-expected private sector employment data does not bode well for sentiment ahead of Friday’s official government report, which significantly missed expectations the previous month. However, economists continue to note that ADP data is not a consistent predictor for nonfarm payrolls.
Adam Button, managing director of Forexlive.com, said that the latest employment data provides further support for a Federal Reserve rate cut by the end of the month.
He added that the jobless in the manufacturing sector highlights the growing pressure from escalating trade tensions. — Kitco News.
Online Reporter