Gold Price Rallies Despite Stronger ADP Jobs Data
London (Dec 4) Gold prices are modestly higher in choppy early trading Wednesday, after hitting another five-month low in the immediate aftermath of the release of the monthly U.S. ADP jobs figure that was stronger than expected. Bargain hunters stepped in to buy the dip in prices after the ADP report, and along with some short covering the gold market quickly pushed back above unchanged. The ADP report continues a recent trend of U.S. economic data that is upbeat. February gold was last up $4.00 at $1,225.00 an ounce. Spot gold was last quoted up $1.50 at $1226.25. March Comex silver last traded up $0.27 at $19.335 an ounce.
Wednesday the heat gets turned up on a big week for economic data. In the U.S., the monthly ADP national employment report for November came in at a strong 215,000 rise in workers. That handily beat market expectations of a rise of around 170,000. The gold market saw immediate selling pressure following the ADP report, although that pressure was not strong and then the bargain hunters stepped in.
Next up Wednesday is the Federal Reserve’s beige book, due out in the early afternoon.
The European Central Bank’s monthly monetary policy meeting is on Thursday and the U.S. jobs report is on Friday.
Traders and investors for many weeks have been buzzing about the precise timing of when the Fed will alter its monetary policy and back off from its monthly bond-buying program—called quantitative easing. So far this week’s batch of generally upbeat U.S. data has fallen into the camp that reckons the Fed will act to taper sooner rather than later. However, the more critical economic data out this week is yet to come. This week’s data will provide at least some new insight on the timing of the Fed’s next move.
The European Union’s latest batch of economic data released Wednesday was mostly downbeat, as gross domestic product stagnated, consumer spending slowed, retail sales declined and manufacturing activity also declined, from their previous readings. These reports suggest the European Central Bank will keep its monetary policy very accommodative for some time to come. To extrapolate further, the latest EU economic data suggests the upside is limited for the Euro currency, which in turn is a bullish development for the U.S. dollar.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. trade report, new residential home sales, the weekly DOE energy stocks report, the global services PMI, the beige book, and the ISM non-manufacturing report on business.
