Investors buying the dip as gold market largely ignores jump in private-sector payrolls

NEW YORK (March 4) The gold market continues to see further volatility as Tuesday’s sharp selloff has attracted some buying interest; however, according to some analysts, the precious metal faces a fundamental headwind following better-than-expected private-sector employment data.

ADP reported Wednesday that 63,000 jobs were created in February, significantly beating expectations. Consensus forecasts had projected job gains of 50,000. The report revised January’s employment data to show that only 11,000 jobs were created at the start of the new year.

The gold market is not seeing much reaction to the latest employment data, as the price action is being driven by technical momentum after Tuesday’s 4% drop. Spot gold last traded at $5,193.22, up 2% on the day.

Although the headline number was better than expected,  Dr. Nela Richardson, chief economist at ADP, said that the labor market still faces some challenges.

“We've seen an increase in hiring and pay gains remain solid, especially for job-stayers,” Richardson said in the report. “But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”

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