Gold price breaks above 1,940.00
Gold price (XAU/USD) extended rally as US Automatic Data Processing (ADP) reported that Employment Change for August missed estimates. The US private sector recorded fresh additions of 177K payrolls, lower than estimates of 195K and July's print of 324K. Four-month outperformance streak by US private employment comes to a halt as firms' hiring slows due to poor economic outlook. The precious metal capitalized on softer job openings data on Tuesday, which accelerated hopes of an unchanged interest rate decision to be taken at the September monetary policy meeting by the Federal Reserve (Fed). Employees’ declining confidence in the labor market gave comfort to Fed policymakers for keeping current interest rates at 5.25-5.50%.
Private sector employment data for August carries higher significance as Fed Chair Jerome Powell promised that further policy action will be data-dependent at the Jackson Hole Symposium. Weak labor demand from US private payrolls could allow Fed policymakers to discuss rate cuts sooner rather than later. Gold price attempts a break above $1,940.00 after a sideways performance as US private employment data has replicated soft job openings data. After a stellar rally, the precious metal reaches near the upper portion of the Rising Channel chart pattern formed on a small time frame. The yellow metal extends its recovery above the 20 and 50-day Exponential Moving Averages (EMAs), which indicates that the mid-term trend has turned bullish.