US private sector job growth in July, according to ADP, fell to 44,000, below the consensus forecast of 70,000 and significantly lower than the previous figure of 98,000. This, coupled with the earlier release of June’s job openings, which also fell short of expectations and the previous figure, suggests that investors have already priced in the weakening US job market. This likely strengthens the expectation that the Federal Reserve will not be able to raise interest rates sharply, and further fuels the speculation that the Fed will only raise rates by a quarter percent this year. This limited rate hike provides positive evidence for gold investors and should drive up gold prices.

A long position can be established around $4,208, with a short-term target of $4,339 for profit-taking and a stop-loss at $4,188.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com