The August nonfarm payrolls (NFP) data is likely to show a 170,000-job increase, following an 187,000-job increase in July.
If the NFP shows less than 150,000 new jobs, traders may reconsider the Fed’s monetary policy outlook. This might weaken the US currency while increasing gold prices.
The next nonfarm payrolls (NFP) data is gaining attention. It is projected that 170,000 new jobs would be created in August, up from 187,000 in July.
In the days preceding up to this report, there was some mediocre job-related data, such as the JOLTS and ADP reports. This has raised concerns that the NFP would show fewer employment than projected. If employment growth disappoints, the US currency and gold may suffer immediate consequences, as signals of a weakening economy may lead the Fed to adopt a more cautious attitude at subsequent meetings.
Just yesterday, ADP reported that private payrolls in August were lower than expected. It was 177,000 jobs, rather than the predicted 195,000.
If the NFP shows more than 200,000 new jobs, there could be a higher risk of inflation. This could help the US dollar but might place pressure on gold prices.
On the other hand, if the NFP has less than 150,000 new jobs, traders might change their thinking about the Fed monetary policy outlook. This could make the US dollar weaker but could be a boost for gold prices. Gold recently peaked just below $1950, so this would be the immediate upside target, followed by last month’s peaks at $1954, $1963, and $1972.