The Bureau of Labor Statistics has released the US Non-farm Payrolls for October, and it shows an employment change of 638K versus the consensus of 595K. This was less than the previous change of 672K (an upward revision). The unemployment rate fell to 6.9%. This figure was less than the consensus drop of 7.7% and also lower than the previous number of 7.9%.
A breakdown of the data shows that employment in government declined, while the hospitality, professional services, construction and retail trade sectors showed improvements. The unemployment rate declined in all major worker groups. Labour force participation grew 0.3% to 61.7%.
Despite the seemingly positive data which should have led to strength on the greenback, the XAUUSD pair that reflects gold prices indicates that gold continues to hold its bullish strength against the US Dollar on the day.
An analysis of the data shows that the number of people who remained unemployed in the long term tripled, moving from 1.2 million to 3.6 million. This group represents a third of all unemployed people in the US. This significant piece of data indicates that the unemployment situation in the US has not improved. Employment is yet to get back to pre-pandemic levels, and the poor ADP employment data and lacklustre jobless claims data do not provide much cause for enthusiasm in an economy which is seeing record new coronavirus infections.
Add the statements from the Fed Chair at yesterday’s FOMC press conference on expanding stimulus, and we have a situation where the greenback remains under pressure in the XAUUSD pair.
Gold price remains 0.53% higher on the day at just under $1960 an ounce.
Technical Levels to Watch
Today’s upside push in gold prices is challenging the 1954.77 resistance and has indeed violated this price level. This move awaits confirmation. A breakout above this level opens the door for bulls to target the 1969.95 price level, with 1980.74 coming into focus as a potentially achievable upside target.
On the flip side, a failure to confirm the break of 1954.77 allows 1940.15 to come into focus once more. This price level would become attainable if we see risk flows into the USD, considering the uncertainty surrounding the US polls. 1918.68 and 1900.76 remain viable targets to the south for sellers.
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XAUUSD Daily Chart
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