Gold price at session highs following disappointing ADP employment data

New York (Aug 4)  The gold market is holding near session highs after labor market data shows that the private sector higher fewer workers than expected in July, according to the latest report from private payrolls processor ADP.

Wednesday, ADP said 330,000 jobs were created last month, significantly missing expectations; consensus forecasts were calling for job growth of around 695,000.

The gold market saw some buying momentum ahead of the report and has pushed back to session highs in initial reaction to the disappointing employment numbers. December gold futures last traded at $1,829 an ounce, up 0.81% on the day.

Although the precious metal has seen a modest boost from the latest employment data, the market is still caught in its current trading channel with resistance at the 200-day moving average, which comes in at $1,832.60 an ounce. Analysts have said that the gold market needs to clear that hurdle to attract new capital.

Investors and markets are sensitive to employment data as the health of the labor market is a significant issue that the Federal Reserve is watching that could determine the pace of tightening.

The gold market has been in a holding pattern. Investors are reluctant to take any major position as the Federal Reserve looks to gather more information.

According to some economists, the latest ADP data creates some downside risk to Friday's official nonfarm payrolls report. However, the private-sector employment data has never been a consistent predictor of Friday's government numbers.

According to consensus forecasts, economists are expecting that 870,000 jobs were created in July. Some central bank officials have said that robust employment data in July and August could prompt the Federal Reserve to reduce its monthly bond purchases by the end of the year.

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