Gold prices are showing little movement on Tuesday. Late in the European session, the spot price stands at $1289.07 an ounce. On the release front, there is just one event in the US, ISM Non-manufacturing PMI. The markets are expecting a slight improvement in the July reading, with an estimate of 56.6 points.
US employment numbers were a disappointment last week, although there was good news in other sectors, and these solid releases have boosted the US dollar and kept gold prices under $1300. On Friday, Nonfarm Payrolls took a tumble, slipping to 209 thousand, compared to 288 thousand a month earlier. This was well below the estimate of 231 thousand and marked a four-month low. Earlier in the week, Unemployment Claims rose to 302 thousand, very close to the estimate of 303 thousand. There was positive news from the manufacturing sector, as US ISM Manufacturing PMI rose to 57.1 points, its best showing since November. As well, UoM Consumer Sentiment continues to look strong, coming in at 81.8 points. The index has not been below the 80-point level in 2014, pointing to strong consumer confidence.
There were no surprises from last week's Federal Reserve policy statement, which was somewhat dovish in tone. Policymakers acknowledged lower US 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%. The Fed has remained vague as to when it will raise interest rates, but if the economy continues moving in the right direction, a rate increase is likely before mid-2105.
XAU/USD 1289.07 H: 1293.54 L: 1287.29
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