Gold Remains Weak, Pressing on Support at $1200

London (Oct 1)  Gold prices are showing little change on Wednesday, as the metal remains under pressure from the strong US dollar. In the European session, the spot price stands at $1208.93 per ounce. There are two key releases on the calendar – ADP Non-Farm Employment Change and ISM Manufacturing PMI. The markets are not expecting significant changes from last month’s readings.

Recent sharp gains by the US dollar are weighing on gold prices, as a stronger dollar diminishes the metal’s appeal as an alternative asset to the dollar. The dollar has enjoyed a spectacular September, and gold prices have tumbled over 6% during this period. With the Fed scheduled to wind up QE and attention shifting to the timing of an interest rate hike, gold could continue to move lower.

The markets are keeping a close eye upcoming US employment numbers, starting with ADP Nonfarm Payrolls later on Wednesday. The estimate stands at 207 thousand, little changed from 204 thousand. The ADP release precedes the official NFP release which will be published on Friday. The markets are anticipating a sharp gain, with an estimate of 216 thousand. If the indicator does follow suit with better numbers this month, the US dollar could post further gains against its major rivals.

US Pending Home Sales posted a decline of 1.0%, compared to last month’s gain of 3.3%. The important housing indicator has shown strong movement, resulting in readings that have been well off market estimates. US housing indicators continue to paint a mixed picture, as New Home Sales jumped last month, while Existing Home Sales softened and was well short of expectations.

Source:  FXstreet