According to market analyst James Hyerczyk, as wage inflation rises, meager payroll increases in September likely won’t deter the Federal Reserve from tapering in November. cryptocoin.com As we reported, gold prices initially rallied after a disappointing headline figure was released in the US Non-Farm Payrolls report, but then gave back previous gains and closed Friday flat.
Gold suffers confusion after NFP data
Gold rallied after lower-than-expected results were announced on Friday, which appeared to be an unexpected reaction to the news. The analyst states that traders initially reacted to a weaker dollar, but eventually an increase in US Treasury yields turned out to be too much for bull traders to handle.
On Friday, Comex gold futures were down 0.10% daily to settle at $1,757.40 after touching the intraday high of $1,782.40. According to James Hyerczyk, despite the early rise, there is no actual proof of purchase. The analyst states that the move was probably short, but the sale was genuine, due to the surprise in the headline numbers of the NFP report.
That’s because two-thirds of employment data and last month’s high revision seem to be enough to keep the Federal Reserve on track to start tapering in November.
What’s in the highly anticipated US NFP Report?
The U.S. economy created the fewest jobs in nine months in September, amid a decline in school hiring and worker shortages. But the decline in COVID-19 cases and the end of generous unemployment benefits could boost employment gains in the months ahead. Additionally, the unemployment rate fell to an 18-month low and wage increases accelerated. Other signs of a limited labor market are reduced permanent job losses and fewer people experiencing long-term unemployment.
Non-Farm Employment created 194,000 jobs last month, according to the Labor Department’s closely watched employment report. August data has been revised to show 366,000 jobs created instead of the 235,000 previously reported. Economists polled by Reuters had predicted payrolls would increase by 500,000 jobs, with forecasts falling from 700,000 to 250,000. Despite the gain, employment is still 5.0 million below its February 2020 peak. Unemployment, on the other hand, was 4.8%, below the expectations of 5.1%. Average hourly earnings rose 0.6% from 0.4% in August.
Short-term outlook on gold prices: Sales will increase
According to market analyst James Hyerczyk, as wage inflation soars, meager payroll increases in September will likely not deter the Federal Reserve from starting its massive monthly bond-buying program this year.
The Fed signaled last month that it might start reducing its asset purchases from November. Economists expect the announcement to come at the policy meeting on November 2-3. The analyst makes the following observation:
Gold traders will use Friday’s price action as a guide for future trading. This means that sales will increase.
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