Commodity Market: Gold gains, US Dollar hovers above 1-month lows ahead of key US employment data

Spot Gold rose on Friday, as the US Dollar hovered just above a fresh one-month low ahead of the highly anticipated US Non-Farm Payrolls report due out later in the day.

A weaker US Dollar makes dollar-priced Gold less expensive for international investors holding other currencies.

“We’re seeing minor pre-positioning for people that may be wanting to take a punt into the non-farm payroll,” Stephen Innes, managing partner at SPI Asset Management, was quoted as saying by Reuters.

A weaker report “would be quite positive for gold, cause it reinforces (Fed Chair Jerome) Powell’s more cautious outlook for the U.S. economy… We could see a break below $1,800 threshold if we get a strong print,” Innes said.

Last week the Fed Chair had said that the central bank could begin scaling back its bond-purchasing program this year in case job growth continues. Yet, the Fed would remain cautious in its decision to hike interest rates.

As of 8:52 GMT on Friday Spot Gold was edging up 0.13% to trade at $1,811.83 per troy ounce, while moving within a daily range of $1,809.05-$1,814.93 per troy ounce.

The yellow metal has retreated a mere 0.07% so far in September, following a rather flat performance in August.

Meanwhile, Gold futures for delivery in December were edging up 0.18% on the day to trade at $1,814.75 per troy ounce, while Silver futures for delivery in December were up 0.52% to trade at $24.043 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching up 0.02% to 92.230 on Friday. Earlier in the session the DXY slipped as low as 92.155, which has been its weakest level since August 5th (92.115).

In terms of macroeconomic data, today market players will be paying attention to the August report on US Non-Farm Payrolls, Unemployment Rate and Average Hourly Earnings due out at 12:30 GMT. Employers in all sectors of US economy, except the farming industry, probably added 750,000 new jobs last month, according to a consensus of analyst estimates.

Yesterday an official government report showed the number of US initial jobless claims had dropped last week, while layoffs had decreased to their lowest level in over 24 years in August.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of September 3rd, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on September 21st-22nd, or unchanged compared to September 2nd.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,810.55
R1 – $1,816.20
R2 – $1,822.84
R3 – $1,828.49
R4 – $1,834.14

S1 – $1,803.92
S2 – $1,798.27
S3 – $1,791.63
S4 – $1,785.00