Gold Yawns As Fed Chair Nomination Looms

 | Nov 03, 2017 01:21AM ET

Gold has ticked higher in the Thursday session. In North American trade, the spot price for an ounce of gold is $1275.93, up 0.16% on the day. On the release front, unemployment claims dropped to 229 thousand, beating the estimate of 235 thousand. The focus will be on employment numbers on Friday, as the US releases Average Hourly Earnings, Nonfarm Payrolls and the unemployment rate. We’ll also get a look at ISM Nonfarm Manufacturing PMI.

The markets weren’t expecting any fireworks from the Federal Reserve, as the November rate statement was expected to be little more than a run-up to the December rate decision. Fed policymakers signaled that a rate hike is very likely in December, and the Fed did not change the wording in the statement with regard to future rate hikes. The tone of the statement was positive, as the Fed noted that the storms which battered the US had caused a decline in payrolls in September, but the storms were not likely to “materially alter the course of the national economy over the medium term.” After a excellent Advance GDP reading of 3.0%, the economy’s next test is nonfarm payrolls on Friday. In September, the indicator declined by 33 thousand, but the markets are counting on a strong rebound, with an estimate of 311 thousand for October. The markets are less bullish on wage growth, which is expected to slow to 0.2%, as inflation remains at low levels, despite strong economic growth.

The Fed remains in the spotlight, as President Trump is expected to announce later on Thursday who will succeed Janet Yellen as Fed chair when her term ends in February 2018. Federal Reserve Governor Jerome Powell is expected to get the nod from Trump. With Powell at the helm, we can expect more of the same from regarding monetary policy; namely, small incremental rate hikes, which has been the stance of the central bank since it began raising rates in December 2015.

XAU/USD Fundamentals

Thursday (November 2)

  • 7:30 US Challenger Job Cuts. Actual -3.0%
  • 8:30 US Unemployment Claims. Estimate 235K. Actual 229K
  • 8:30 US FOMC Member Jerome Powell Speaks
  • 8:30 US Preliminary Nonfarm Productivity. Estimate 2.5%. Actual 3.0%
  • 8:30 US Preliminary Unit Labor Costs. Estimate 0.5%. Actual 0.5%
  • 10:30 US Natural Gas Storage. Estimate 63B. Actual 65B
  • 12:20 US FOMC Member William Dudley Speaks

Friday (November 3)

  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 311K
  • 8:30 US Unemployment Rate. Estimate 4.2%
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 58.5
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*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, November 2, 2017