Gold is consolidating at the high end of the recent range as the market looks ahead to tomorrow's U.S. jobs report. The yellow metal set a three-week high on Wednesday at 1484.07 and remains generally well bid within striking distance of that high.
U.S. nonfarm payrolls for November will be reported tomorrow morning with expectations running at +184k. The unemployment rate is expected to hold steady at 3.6%.
There is perhaps some downside risk for the headline number in the wake of yesterday's rather significant miss on the ADP employment survey. The ADP survey came in at just +67k, well below expectations of +140k, versus a negatively revised +121k in October (was +125k). That's the fewest number of job gains in six-months.
The market seems to be disregarding Nancy Pelosi's announcement today that the House will proceed with articles of impeachment against President Trump. While the House is likely to impeach on a party-line vote, the odds of a Senate conviction remain pretty long.
There's not much new on the trade war front, although the House passed another bill that the Chinese view as meddling in their internal affairs. The legislation condemns Beijing's crackdown on the Muslim Uighur minority in Tibet and Xinjiang.
This bill comes a week after the U.S. House passed legislation in support of pro-democracy protesters in Hong Kong. President Trump signed this bill and I presume he will sign the Uighur legislation as well, which arguably further deteriorates the likelihood of a trade deal.
Markets have been paying an inordinate amount of attention to the ebb and flow of trade deal odds. If those odds are seen as getting longer, gold should garner further support.
A short-term breach of resistance at 1486.93/1488.10 is needed to bolster confidence in the underlying uptrend. This level is marked by the 100-day SMA and 38.2% retracement of the decline off the September high.
A nonfarm payrolls miss tomorrow could trigger such a move, as could more pessimism on the trade front.
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