Gold and other precious metals are trading slightly down on Wednesday as investors are digesting a strong Service PMI data in the Eurozone, while a disappointing ADP employment in the United States.
Commodities are trading in range while the US Dollar index is falling today after getting a rejection at 97.50 on Tuesday’s session.
Mix data put metals rangebound
Earlier in the day, PMI Services in China, Germany, and the whole eurozone showed improvements in the sector for March. Also, retail sales in the eurozone showed a better than expected performance in February.
However, on the other side of the Atlantic the employment sector showed another disappointing signal as the ADP private employment reported creation of “only” 129K new jobs in the United States in March. Well below the 170K expected by market.
PMI Services in the United States reported a better than expected number for March and improvement of conditions for the sector in March.
However, ISM non-manufacturing data surprised market with a deeper than expected decline in March at 56. from February number of 59.7. Remember that any number above 50 signals expansion in the sector.
In this framework, precious metals such as gold, silver, and palladium are trading in small ranges as pairs are waiting for the next catalyst.
Dollar index down after rejecting 97.50
The greenback is extending on Wednesday the rejection at the 97.50 performed on Tuesday. DXY is testing the 97.00, and it is now trading at 97.12, 0.19% negative on the day.
The dollar is falling as the unit is trading in consolidation following the recent rally from 96.40 to 97.50, its highest level since March 8.
Also, investors are waiting for more news regarding a possible China-US trade deal. According to FX Empire analyst James Hyerczyk, “the dollar is weakening because long-hedgers betting against a U.S.-China trade deal are bailing out of their positions.”
Hyerczyk signaled as catalyst a report from the Financial Times that said both superpowers are close to signing an agreement that would end the trade dispute.
With the dollar index falling, why Gold is not rising? Because overall sentiment is positive with risk sentiment on over the table. Also, traders are waiting for the employment report on Friday.
Gold sideways ahead of US critical data
XAUUSD daily chart Gold April 3
Gold is trading slightly negative on Wednesday as investors are digesting ADP weak report and a pro-risk environment in the market.
XAU/USD is trading 0.26% negative on the day around 1,288 as it is trading between the 1,285 and 1,295 range. The pair is showing signs of being oversold.
According to Brian Lan, managing director at dealer GoldSilver Central in Singapore, “there won’t be much movement in gold prices as stocks have gone up to their highs in Asia and investors are not seeing gold as a good safe-haven.”
If the pair extends its decline and breaks below the range at 1,285, it will find next support at 1,280, critical level and March 5 and 7 lows. Below there, the 200-day moving average is waiting at 1,248.
Silver down as it tests 15.00 level
XAGUSD daily chart Silver April 3
Silver is trading negative on Wednesday amid positive correlation with gold and a XAG/USD waiting for a catalyst.
XAU/USD is trading 0.38% negative on the day at 15.05. The pair is testing the 15.00 area while moving in a range between 14.90 and 15.20.
The unit looks oversold, and odds are for more declines. The United States employment report and its Nonfarm payrolls data are expecting as catalysts.
This article was originally posted on FX Empire
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