Gold has rebounded on Thursday, posting considerable gains. In North American trade, the spot price for an ounce of gold is $1381.81, up 0.41% on the day. On the release front, ADP Payrolls report jumped to 250 thousand, crushing the estimate of 191 thousand. However, unemployment claims rose to 250 thousand, higher than the forecast of 241 thousand. The focus remains on job data on Friday, with the release of Average Hourly Earnings and Nonfarm Payrolls. Traders should be prepared for some movement in gold prices in Friday’s North American session.
The highly-anticipated Federal Reserve minutes were released on Wednesday. The minutes provided details of the December policy meeting, where the Fed raised interest rates for a third time in 2018. The minutes were positive in tone, reflecting a robust US economy. Policymakers noted that economic activity was expanding at a "solid pace", buoyed by improved consumer and business spending, as well as a stronger global economy. FOMC members revised upwards their projection for GDP in 2018, from 2.1% to 2.5%. The minutes noted that new tax reform is expected to raise economic growth, but the Fed is unsure on the impact of the new law in areas such as the labor market. As for inflation, Fed officials remain concerned that inflation levels are well below the target of 2%, and this trend could continue.
US employment numbers were a mixed bag on Thursday, which weighed broadly on the US dollar. Will we see a repeat on Friday? The markets are expecting wage growth to improve to 0.3%, but are braced for a slowdown from Nonfarm Payrolls. Investors will be keeping a keen eye on these December releases, as will the Federal Reserve. Currently, the odds of a January rate hike are at 99.5%, according to the CME. However, a poor showing by Nonfarm Payrolls could lower these odds and send the US dollar to lower ground.
