Gold price eyes recovery after a long selloff

Gold price up by 0.07%; trading at $1823.78 per ounce at the time of writing. The precious metal is looking forward to recovery due to softer than expected US ADP Employment Change data. Job vacancies by US employers were upbeat in August, indicating strong labor demand.

However, the US Services PMI landed dropped to 53.6 as expected, and new orders were down significantly. The gold price did not find buying interest despite the downbeat United States labor market and soft ISM Services PMI data.

The US Automatic Data Processing reported a sharp decline in the hiring of private payrolls for September, with US employers picking 89k fresh talent from the market against expectations of 153k and August’s reading of 177k. This indicates a soft labor demand that will set a neutral undertone for the Fed’s November monetary policy meeting.

The broader outlook for the precious metal could improve as Fed policymakers may turn neutral ahead. The Services PMI data carries a significant impact on the US Dollar Index, representing the service sector, which accounts for two-thirds of the US economy. The US Dollar rebounds after correcting to near 106.60 as the economic outlook is broadly upbeat.

On Tuesday, the precious metal attempted a recovery near $1,820.00 but failed to capitalize on the same due to hawkish interest rate guidance from Federal Reserve policymakers and upbeat JOLTS Job Opening data. The US Bureau of Labour Statistics reported fresh job vacancies at 9.61 million against expectations of 8.8 million, signifying healthy labor demand. Cleveland Fed Bank President Loretta Mester reiterated hawkish guidance on the interest rate outlook, saying she is open to hiking interest rates further in the November monetary policy meeting if the economy remains resilient.

Atlanta Fed Bank President Raphael Bostic said that one rate cut could be announced in late 2024 and core inflation would come down to 2% near the end of 2025. Gold price struggles for a direction, trading near $1,820.00 after an intense sell-off as investors shift their focus to the US labour market data for further guidance.