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Gold (XAU/USD) rose to the highest level in two weeks at $1992.42 before witnessing a sharp $40 reversal to near $1954 levels on Tuesday. The spot, however, recovered some ground to settle the day at $1965. On Wednesday, US ADP jobs are in focus after weak ISM Employment Index, FXStreet’s Dhwani Mehta briefs.

Key quotes

“Attention turns towards the US ADP jobs report due later on Wednesday at 12:15 GMT. Markets are expecting the US private sector to add 950K jobs in August vs. +167K last. However, a disappointment cannot be ruled out, given that the ISM Manufacturing Employment sub-index remained in contraction last month. The dollar pullback could stall on downbeat US ADP numbers, as it would point to a weaker US NFP report due on Friday. Therefore, gold is likely to trade with caution heading into the US ADP data, although another run towards $2000 mark cannot be ruled out going forward.”

“Buyers still remain hopeful and could attempt another run towards the $2000 mark should the US ADP data disappoint and trigger renewed dollar weakness. The $1950 level could be tested once again on the above-forecast jobs report. A break below which the rising trendline support at $1923 will be put at risk.”

“The daily Relative Strength Index (RSI) trades flat but holds above the midline, currently at 54.50, still backing the bullish case.”

 

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