Gold trading levels today: Buy the yellow metal lower on Iran-Israel news | Market news

geopolitical clock:

Markets are concerned about Israel’s response to Iran’s ballistic missile attack. Iran said it was done with its attack. Israel, however, vowed strong retaliation to Iran’s attack. The US president said he was discussing supporting Israel’s attack on Iran’s oil facilities. Iran has promised to take strong action if Israel retaliates, thus the worsening geopolitical situation has caused the geopolitical premium in gold prices to rise.

Data Summary:

US ISM services data (September) released on Thursday came in at 54.90 and beat the forecast of 51.70 by a wide margin. ISM Paid Prices rose to 59.40 (forecast 56) from 57.30 in August as ISM new service orders at 59.40 were well above the 52.50 forecast.

Although employment dipped into contraction territory, the overall ISM services report could be considered a robust one, which reduced the odds of 50 bps at the next FOMC meeting. The weekly jobs report was mixed as weekly claims came in at 225,000, beating the forecast of 221,000, but continuous claims at 18,26,000 beat the estimate of 18,30,000.

Factory orders (August) came in at -0.20 percent, compared to the forecast of 0.20 percent. Overall, the US data released on Thursday could be considered positive for the US economy and the US dollar index.

US ADP (September) data released on Wednesday came in at 143,000, better than the 120,000 expected. Notably, JOLT (August) job openings, released on Tuesday, also beat the forecast. Eurozone services PMI (end September) was revised higher from 50.50 to 51.40 as even the composite PMI was better than the initial estimate.

Future dates:

Traders will be closely watching the US non-farm payrolls report due out today. The report is important because the Fed is alert to any alarming weakness in the US labor market. The unexpectedly weak report will increase the likelihood of a 50 basis point cut at the next FOMC meeting, which will be positive for the metal. It is estimated that the non-farm payrolls report may throw a positive surprise.

The Fed Speaks:

Federal Reserve Bank of Richmond President Tom Berkin said progress has been made on inflation, but the Fed cannot yet declare victory over inflation. Goolsbee said they have lowered inflation.

Action by central banks:

Global central banks bought a net 8 tonnes of gold in August.

Gold ETFs:

Total known gold ETF holdings worldwide were 83.376 MOz as of October 2; thus, the holdings were heading for their fourth straight weekly gain.

Outlook:

Gold is expected to be highly volatile due to geopolitical concerns and the crucial non-farm payrolls report. Geopolitical concerns will keep metal supply down; however, fresh catalysts are needed to help break the metal out of its $2,620-$2,685 range.

Support is $2,620 (Rs 75,200). Resistance is at $2,685/$2,700 (Rs77,100/$77,500).

First publication: 04 October 2024 | 10:09 AM IST