- The August nonfarm payrolls (NFP) report is expected to reveal a job growth of around 170,000, following a rise of 187,000 in July.
- 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.
Focus is growing on the upcoming nonfarm payrolls (NFP) report. In August, it’s expected that there will be about 170,000 new jobs (compared to 187,000 in July).
The days leading up to this report have had some not-so-great job-related data, like the JOLTS and ADP reports. This has heightened expectations that the NFP might show fewer jobs than expected. The US dollar and Gold may feel the immediate effects if job growth disappoints, as signs that the economy is slowing could force the Fed to adopt a more cautious stance at upcoming meetings.
Just yesterday, the ADP report for private payrolls in August was lower than what experts predicted. It was 177,000 jobs instead of the expected 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.