- Gold trading faced headwinds due to a stronger U.S. dollar, but investors remained focused on positive data from the ADP National Employment report.
- The ADP report showed strong job growth, while Fitch’s credit rating downgrade affected gold prices, causing a retreat and possible test of technical support at $1,930.
Gold trading faced headwinds on Wednesday as the U.S. dollar strengthened despite Fitch’s downgrade of the U.S. credit rating to AA+ from AAA. Investors seemed unfazed and focused on positive data from the ADP National Employment report that might possibly indicate a larger-than-expected Non-Farm Payrolls report this Friday.
The ADP National Employment report revealed private businesses in the US hired 324K workers in July 2023, surpassing market expectations of 189K. Fitch’s decision to downgrade the U.S. credit rating was attributed to concerns about potential fiscal deterioration over the next three years and the debt ceiling crisis that was averted at the last minute a couple months ago.
The impact of these developments on XAU/USD was evident, as it retreated for the second consecutive session, currently testing at $1,935 on the chart and might be approaching a significant technical support level at $1,930. On the flip side, if gold resumes its rebound, it may encounter initial resistance around $1,942, followed by the psychologically important $1,950 mark.
Is it likely that the NFP will mimic ADP’s performance and exceed the estimate?
