Gold was nervous and choppy overnight – typical for a market at long term highs (9-month highs) - trading in a range of $1316.70 - $1322.20.
It traded down to its $1316.70 low during Asian and early European hours, where support from yesterday’s $1317 low essentially held.
Gold was pressured by a firmer US dollar (DX to 95.66), which was supported by weakness in the yuan (6.6995 – 6.7418) from a weaker Chinese PMI report.
Later during European time, gold recovered and reached its $1322.20 high as the DX retreated to 95.45.
The dollar softened against a firming euro ($1.1435 - $1.1475) off of an upbeat Eurozone CPI reading.
Global equities were mixed with the NIKKEI +0.1%, the SCI up 1.3%, European markets ranged from -0.2% to +0.2%, while S&P futures were -0.1%. Weaker oil prices (WTI from $54.19 - $53.38) was a headwind for stocks.
At 8:30 AM, the Non-Farm Payroll component of the US Jobs Report was a blow out: +304k jobs (exp. 165k).
Initially, algorithmic trading drove S&P futures higher (from 2696 to 2709), and took the US 10-year bond yield up from 2.624% to 2.645%.
The DX shot to 95.61, and gold tumbled to $1317.75. After a closer look, the report was seen as less robust as last month’s payrolls were revised down from 312k to 222k, Average Hourly Earnings were less than expected (0.1% vs. exp. 0.3%), and the Unemployment Rate ticked up to 4% (exp 3.9%).
S&P futures retreated to 2700, but the 10-year yield rose further to 2.686%. The DX plunged to 95.39, and gold reversed to take out the overnight high, and reached $1323.50.
At 10AM, stronger than expected reports on US ISM Manufacturing (56.6 vs. exp. 54.2), Construction Spending...