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Gold edges up as dollar stays weak ahead of U.S. jobs data

 

·         Gold edged higher on Wednesday, propped up by a subdued dollar, although prices lingered in a narrow range as investors focused on U.S. jobs data due later this week to gauge economic recovery.

 

 

·         Spot gold rose 0.2% to $1,813.78 per ounce by 0652 GMT, while U.S. gold futures were up 0.1% at $1,816.50.

 

 

·         Gold appears to be in wait-and-see mode, said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.

 

 

·         The National Employment Report by payroll processor ADP, due later in the day, could set the stage for the much anticipated U.S. non-farm payroll numbers on Friday.

 

 

·         The labour market would take time to heal from the effects of the pandemic, and more is needed to be done for the economy to get fully back on track, Federal Reserve officials said on Tuesday.

 

 

·         Gold prices are holding well above medium-term technical support levels and could find resistance intraday at $1,816 and then at $1,827, said Nicholas Frappell, global general manager at ABC Bullion.

 

 

·         FXStreet: Technical analysis
 

Gold extends rebound from 50-SMA amid gradually improving RSI conditions and receding bearish bias of the MACD histogram, suggesting further advances targeting July 25 high near $1,825.

However, double-top formation near $1,832-34 becomes a tough nut to crack for the metal buyers, which if crossed won’t hesitate to challenge late May’s low near $1,872.

During the rise, early June’s bottom surrounding $1,856 may offer an intermediate halt.

Alternatively, a downside break of 50-SMA, near $1,809, will be challenged by an ascending support line from June 29, close to $1,801, as well as the $1,800 round figure.

Overall, gold buyers remain unconvinced below $1,834 but intermediate consolidation can’t be ruled out.

 

 

 

Gold Price Forecast: XAU/USD lacks a directional bias as simmers a range breakout

Heading into a busy docket this Wednesday, gold is attempting a comeback. As FXStreet’s Dhwani Mehta notes, XAU/USD awaits a range breakout but not so soon while US NFP is in focus.

“The downward-sloping 21-Simple Moving Average (SMA) at $1815 is testing the bulls’ commitment, as the range play above $1800 extends. On the other hand, the mildly bullish 50-SMA at $1810 is protecting the downside.”

“A sustained break above the 21-SMA could boost the buying interest, with gold bulls targeting the August 2 highs at $1820. However, the 50-SMA support caves in on a sustained basis, then XAU/USD could see a sharp drop towards the ascending 200-SMA at $1799. Ahead of that the August 2 lows of $1806 could be put at test.”

 

 

·         Silver gained 0.4% to $25.65 per ounce, platinum fell 0.1% to $1,048.03 and palladium rose 0.2% to $2,653.81.

 

 

 

·         Growth in China's July services activity speeds up, but risks loom - Caixin PMI

Growth in China's services sector accelerated in July, a private survey showed on Wednesday, although the spread of the COVID-19 Delta variant across the country threatens to undercut the recovery in the world's second-biggest economy.

The Caixin/Markit services Purchasing Managers' Index (PMI)rose to 54.9 in July, the highest since May and up from 50.3 the previous month. The 50-point mark separates growth from contraction on a monthly basis.

 

·         ‘Made in China’ products are running into new logistics problems*

Chinese home appliance company Hisense has big plans to sell more goods overseas, but it said global shipping congestion has multiplied costs and caused delays.

·         From Beijing to Wuhan, China orders mass testing and restrictions as Covid cases rise

·         Japan signals it may roll back Covid policy that limited hospitalization to serious cases

·         Japan's service sector activity shrinks at faster pace in July - PMI

Japan’s services sector activity shrank at a faster pace in July to contract for the 18th consecutive month as curbs rolled out to combat a resurgence in coronavirus infections dealt a blow to business activity and confidence.

The final au Jibun Bank Japan Services Purchasing Managers’ Index (PMI) dropped to a seasonally adjusted 47.4 from the previous month’s final 48.0 level, and compared with a 46.4 flash reading.

 

 

·         India's services activity shrank again in July, outlook turned pessimistic

Although the Services Purchasing Managers’ Index, compiled by IHS Markit, rose to 45.4 in July from 41.2 in June it stayed firmly below the 50-level separating growth from contraction for a third month.

Overall demand in the sector shrank again last month, albeit at a slower pace, and overseas demand declined for a 17th month - the longest streak since the sub-index started in September 2014.

 

·         Southeast Asia's factory powerhouses hit by vaccination woes, Delta

Fresh outbreaks of the Delta coronavirus variant in Southeast Asia have crippled its factory sector, disrupting global supplies of goods such as rubber gloves, semiconductors and SUVs and threatening the $3 trillion region's recovery.

A series of factory surveys this week showed business activity across most Southeast Asian economies fell sharply in July, a contrast to more resilient manufacturing economies in Northeast Asia and the West, where business growth has slowed but remained in expansion.

HSBC economists warn the low inoculation rates in Indonesia, Vietnam, the Philippines and Thailand, as well as the uncertain efficacy of their vaccines, put their economies at risk.

 

 

·         In Thailand, Asia's fourth-largest auto exporter and a production base for major global car brands, Toyota Motor Corp (7203.T) suspended production at three of its plants in July in July due to parts shortages caused by the pandemic.

 

 

·         Singapore banks' quarterly results signal growth slowdown amid COVID impact

 

 

Reference: CNBC, Reuters, FXStreet