Gold price (XAU/USD) delivers a consolidation breakout as the United States Bureau of Labor Statistics (BLS) has reported that job growth slowed in October. The Nonfarm Payrolls (NFP) were lower at 150K than expectations of 180K and the 297K payroll additions in September, which were revised lower. Economists expected slower job growth in October as at least 30K workers of the United Auto Workers (UAW) union went on strike against Detroit’s “Big Three” car makers. The Unemployment Rate rose to 3.9%, against expectations and the prior release of 3.8%.
Apart from the headline figure of job growth, the Average Hourly Earnings data that provides guidance on consumer spending and inflation, rose at a slower pace of 0.2% in October against the consensus and the former reading of 0.3% on a monthly basis. The annual Average Hourly Earnings data gained at a higher pace of 4.1% against expectations of 4.0% growth but remained below the former reading of 4.2%. Subdued labor growth and slow wage hikes have eased bets for one more interest rate increase from the Fed. The near-term demand for Gold has strengthened further due to persisting geopolitical tensions in the Middle East and expectations that the Federal Reserve (Fed) will keep interest rates elevated for a significantly longer period and slow job growth in October. Gold price attempts to break the consolidation in the range of $1,975-1,990 to the psychological resistance of $2,000.00 after the release of the US labor market data. A volatile action in Gold was highly anticipated after the release of the US labor market data. On a broader note, the trend for Gold is bullish as the 20-day and 50-day Exponential Moving Averages (EMAs) are sloping higher. Momentum indicators also oscillate in the bullish range, indicating strength in the upside momentum.
