Gold Traders are Cautious Ahead of Friday’s Jobs Report

According to the CME’s FedWatch tool, there is an 86.4% probability that this month’s FOMC meeting will result in an interest rate hike of 75 to 100 basis points. The final major report, available to members of the Federal Reserve prior to the meeting on March 14, will be the jobs report of nonfarm payrolls due out on Friday. As mentioned by Janet Yellen in her speech last Friday, the data provided on the jobs report will allow the Fed to evaluate whether or not employment is continuing to evolve in line with their expectations.

Speaking to the Economic Club of Chicago on Friday, March 3, Yellen said, “Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.” 

Gold Prices Caught in a Tug-of-War

While it is obvious that an interest rate hike would and has had a negative impact on gold pricing, current geopolitical and national concerns have been supportive of gold prices. The net result of these two opposing forces is that gold futures have closed, in essence, unchanged today, trading at $1226.50.

Geopolitical concerns have ramped up with North Korea’s missile tests this week. National concerns are currently focusing on accusations by President Donald Trump accusing former President Barak Obama of wiretapping during last year’s election. These factors are just the tip of the iceberg, with many other underlying hotspots and issues collectively raising the level of uncertainty.

Overall, we have seen US markets trade in a subdued manner, with US equities trading slightly lower, and the Dow Jones Industrial Average closing off by a quarter percent at 20,954. The US dollar was slightly changed, closing up just over a 10^th of a percent at 101.67.

With all of the uncertainty both globally and nationally, it is an absolute shame that the President of the United States is focused upon his belief of a past action which has little or nothing to do with the future of our country or the state of our economic growth. Even under the incredibly remote possibility that he is correct, what can be gained by focusing upon something that has zero relevance to future events? If the president is truly interested in increasing the economic prosperity in America, he needs to focus on matters that will aid in accomplishing those goals.

Wishing you as always, good trading,