The last Friday's US economy release proved to be unexpectedly disappointing since the employment picture showed the weakest payroll gains for at least six years. According to the data, the nonfarm payrolls advanced by a seasonally adjusted 38,000 for the previous month, strongly below a revised of 123,000 figure registered for April as well as strongly below expectations for an acceleration of about 160,000. Overall, employers employed 59,000 fewer workers in March and April than previously reported. Majority of economists agreed that following Friday's disappointing US employment report could eliminate the chance that Fed officials would tighten policy during their meeting on June 14-15 in Washington as well as may make it difficult raise the rate in July. The report, which was also released in the same day by the Labor Department is unemployment rate which went down to 4.7%. Meanwhile, following rate does not include those who did not actively look for employment or the underemployed who were working part time for economic reasons. The following data demonstrates the harshest drop in almost nine years since people abandon the labour force. Overall, the steep decline in the labour force during the last couple months of course defies hopes that disenfranchised workers are going to return to the jobs market.
According to the latest release, the US labour market conditions index (LMCI) showed a 4.8 decline for the previous month, taking into account a revised 3.4 drop also for May. The following data confirms the fifth successive decrease simultaneously is maintaining a very disappointing trend seen for a whole 2016 year. The freshly release data could provoke fresh doubts whether the Federal Reserve will be able to raise interest rates in the near future even despite the purely negative Friday's employment data. Moreover, following the declines in the previous two months, the overall down-trend has spurred and this is the longest pace below the zero level since the 2007/08 financial crash. There is an important risk that it impossible for companies to find suitable staff, especially as delivery backlogs and longer delivery times has been significant features in recent PMI data which suggests capacity constraints. Also, On Monday the Federal Reserve Chair Janet Yellen held a speech and drop a hint that interest rate raise still could be possible since positive economic releases have outweighed the negative. Meanwhile, in case if the US economy gives further indications in the upcoming month that it is slowing, any expectations about possible monetary rate increase will disappear.
Upcoming fundamentals: US Unit Labor Costs
Gold regains losses as US Dollar falls on Friday
Daily chart: After US Non-Farm Employment data sent gold drastically up from 1,210.49 to 1,243.86, the bullion did not rebound and continued surging on Monday passing the 55-day SMA at 1,244.09. At the moment, the yellow metal has lost a little of its value and is trading at 1,243.73 per ounce. In the meantime, since it had passed the 55-day SMA, it could move up to the first weekly resistance at 1,259.11. However, if the metal keeps struggling with the simple moving average and falls, then a move to the monthly pivot points at 1,239.18 is most likely. Technical indicators are predicting a downfall for gold today.SWFX market sentiment becomes bullish on Monday
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,275 by the end of August
Traders who were asked regarding their longer-term views on gold between May 7 and June 7 expect, on average, to see the metal around 1,275 by the end of August. Generally, 58% (-1%) of participants believe the price will be generally above 1,250 in ninety days. Alongside, 33% (+1%) of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months.