Oil Prices Retreat, Gold Vulnerable After ADP Report
2023.07.07 03:34
Despite positive momentum, oil falls short once more
prices are retreating in risk-averse trade today. The report has clearly had a negative impact given it likely means we’re facing another red-hot jobs report tomorrow and the prospect of higher rates for longer.
It also came at an opportune time, with the price flirting with the peak from two weeks ago, only to turn south having fallen just shy of surpassing it. That means we’re seen yet another failed new high or low in recent weeks and the gradual consolidation, roughly between $72-$77 is still in play.
This time it was close and there was good momentum going into the ADP release but it seems the jobs number was just too big. A repeat performance tomorrow could cement that and undo the efforts of the Saudis and Russians earlier this week in seeking to drive the price higher.
Is gold vulnerable to another big break?
brief rebound is seemingly over, with the price already struggling around $1,930-$1,940 before ADP delivered a hammer blow to it. The yellow metal is back trading just above $1,900, a level that’s now looking very vulnerable ahead of tomorrow’s jobs report.
If it manages to hold above in the interim, a hot report could be the straw that breaks the camel’s back. Suddenly it will become a question of whether another hike in September is unavoidable against the backdrop of such a hot labour market. These aren’t the only figures that matter but they do significantly weaken the case for another pause.
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