Gold has posted slight gains in the Wednesday session. In North American trade, the spot price for an ounce of gold is $1341.29, up 0.20% on the day. On the release front, ADP Nonfarm Payrolls slowed to 234 thousand, but this was much stronger than the estimate of 186 thousand. As well, Pending Home Sales improved to 0.5%, matching the estimate. Later in the day, the Federal Reserve will release a rate statement, and is expected to hold rates at a range between 1.25% -1.50%. On Thursday, the US releases two key indicators – unemployment claims and the ISM Manufacturing PMI.
Gold is down slightly this week, as the dollar has steadied following last week’s USD selloff. Since the start of the year, gold is up 2.2%, joining the major currencies which have posted gains against the greenback in 2018. This has been somewhat of a surprise, as a strong US economy has supported risk appetite, yet investors have not abandoned the yellow metal early in 2018.
The Federal Reserve will be in the spotlight later on Wednesday, with the release of rate statement, the final one under Janet Yellen’s watch. The tone of the statement could affect investor sentiment and have a substantial impact on the direction of gold. It’s a virtual certainty that the Fed will leaves rates unchanged this time around, although it’s likely that the Fed will raise rates by a quarter-point at the March meeting. Yellen will make way for Jerome Powell, who takes over as chair in early February. Powell is expected to hold the course on monetary policy, which was marked by small, incremental interest rates in order to keep the robust US economy from overheating.
