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Commodity Market: Gold stuck in tight range, US Dollar hits a fresh 3-month high ahead of key US NFP data

Spot Gold remained stuck within a narrow range on Friday, as the US Dollar advanced to a fresh three-month high ahead of the key US Non-Farm Payrolls data that could influence the Fed’s monetary policy stance.

A stronger dollar makes Gold more expensive for international investors holding other currencies.

In other news, the Democratic-controlled US House of Representatives gave a $715 billion surface transportation and water infrastructure bill a green light. This is viewed by Democrats as an early step toward sweeping infrastructure legislation.

There have also been investor bets that US Treasury yields will remain subdued or continue decreasing during the second half of 2021.

As of 8:17 GMT on Friday Spot Gold was edging up 0.21% to trade at $1,780.35 per troy ounce. Earlier this week the metal slipped as low as $1,750.74 per troy ounce, which has been its weakest price level since April 15th ($1,734.49 per troy ounce).

The yellow metal retreated 7.14% in June, which has been its steepest monthly loss since November 2016.

Meanwhile, Gold futures for delivery in August were edging up 0.24% on the day to trade at $1,781.15 per troy ounce, while Silver futures for delivery in July were up 0.45% to trade at $26.192 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging up 0.15% to 92.670 on Friday. Earlier in the session the DXY rose to 92.698, which has been its strongest level since April 6th (92.788).

In terms of macroeconomic data, today market players will be paying attention to the June 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 690,000 new jobs last month, according to a consensus of analyst estimates.

Yesterday an official government report showed that the number of Americans filing for unemployment benefits for the first time had dropped more than anticipated last week, while layoffs decreased to a 21-year low in June.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of July 2nd, 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 July 27th-28th, or unchanged compared to July 1st.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,775.10
R1 – $1,784.45
R2 – $1,792.25
R3 – $1,801.60
R4 – $1,810.96

S1 – $1,767.30
S2 – $1,757.95
S3 – $1,750.15
S4 – $1,742.36

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