Gold prices are stable on Friday, but remain under pressure. The precious metal posted losses a day earlier and dropped below the 1280 line, its lowest level since June 19. In the European session, the spot price stands at $1283.96 an ounce. It's a busy day on the release front, with three key events later in the day - Nonfarm Employment Change, Unemployment Rate and ISM Manufacturing PMI. We'll also get a look at consumer confidence levels, with the release of UoM Consumer Sentiment.
On Thursday, Unemployment Claims came in at 302 thousand, higher than the previous release but very close to the estimate of 303 thousand. Earlier in the week, ADP Nonfarm Payrolls posted a sharp drop. If the official NFP release follows suit and misses the estimate of 234 thousand, gold could take advantage and regain some of Thursday's losses. Meanwhile, US GDP exceeded expectations in the second quarter, as the economy expanded at an annual rate of 4.0%. This easily beat the estimate of 3.1% and marked the strongest quarter of economic growth since Q4 of 2009. The boost in economic activity was helped by strong consumer confidence and business investment, as well as solid employment data. The US dollar took advantage of the strong numbers, posting gains against its major rivals.
The Federal Reserve released a policy statement on Wednesday, with the Fed sounding somewhat dovish in tone. Policymakers acknowledged lower unemployment levels, but noted that "there remains significant underutilization of labor resources" in the economy. The Fed statement reinforces the view that the US central bank is in no rush to raise interest rates after the termination of QE, which is expected in October. As well, the Fed said that inflation levels have moved somewhat closer to the Fed's target of 2.0%.
XAU/USD 1283.96 H: 1285.61 L: 1282.31
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