Gold is listless on Wednesday, as the spot price stands at $1327.61 per ounce in the European session. On the release front, today's highlight is the ADP Nonfarm Payrolls, which should be treated as a market-mover. As well, Federal Reserve chair Janet Yellen will address the IMF in Washington.
Last week's US GDP release for Q1 was a disaster, as the economy contracted by almost 3%. However, the markets remained calm, and the US dollar escaped without much damage against most of its major rivals. More recent releases have been better, notably consumer confidence and housing data. Pending Home Sales jumped 6.1%, crushing the estimate of 1.4%. This was the strongest gain since May 2013. This reading followed New Home Sales and Existing Home Sales, which both beat their estimates. The markets are keeping a close eye on ADP Nonfarm Payrolls, which is published prior to the official NFP release. The markets are expecting the indicator to improve to 207 thousand, compared to a gain of just 179 thousand a month earlier. An unexpected reading could see gold break out of its current holding pattern.
With the ECB holding a policy meeting on Thursday, Eurozone employment numbers are being carefully scrutinized. There was good news on Tuesday, as the Eurozone Unemployment Rate dipped to 11.6%, its lowest level in almost two years. This edged below the estimate of 11.7%. The strong reading could contribute to the ECB deciding to maintain current policy and not introduce a more accommodative monetary stance. At the July meeting, the ECB took unprecedented steps to combat low growth and inflation, including negative deposit rates.
