Gold prices are moving higher this morning to begin the new trading week. Stocks, oil and the dollar index are all also in the green thus far this morning.
Gold is hanging around the previous support level of $1180, and appears intent on trying to avoid straying too far from this level on the downside.
Precious metals investors will be watching the data stream closely this week. Some of the recent data that has been released has been sluggish. If that trend continues, it may make the Fed think twice before raising interest rates. In fact, some are saying that it could potentially take a rate hike off the table until next year.
This week, markets will get the latest data on factory orders, international trade, PMI Services Index, ISM Non-Manufacturing, ADP employment report, weekly jobless claims, productivity and costs and non-farm payrolls data for April.
While all of the data will be scrutinized, it is Friday’s jobs data that may have the most influence over the Fed. The non-farm payrolls data for March was a big disappointment, and should the data for April prove to be the same, the Fed may very well hold off on raising rates. On the other hand, if the data for March was somewhat of a “fluke” and was due to poor weather and other factors and the data shows a nice rebound on Friday, it may pave the way for the Fed to act.
Consensus estimates are looking for an increase of 220,000 jobs with an unemployment rate of 5.4 percent.
Also potentially affecting the precious metals complex is the ongoing debt negotiations between Greece and the EU. After weeks of essentially zero progress being made, the country reshuffled its negotiating team and according to some reports significant progress is now being made.
There remains much work yet to be done, however. The possibility if a Greek exit is still very much in play, and this possibility may keep a floor under gold prices for the foreseeable future until more is determined.
The technical picture in gold still points to sideways to lower price action. The gold bulls have not been able to put together a sustainable rally, while the gold bears have not been able to carve out fresh lows. Gold is likely comfortable in its recent trading range as investors await more inputs.
That being said, this trading range likely won’t go on indefinitely. At some point, gold will tip its hand with a directional move that could potentially be significant. This could possibly happen once more is known about the timing of interest rate hikes and whether or not Greece remains a member of the EU.
