US August ADP Employment Data Falls Short of Expectations, Gold Prices Rebound Volatilely

International gold prices rose about 1.4% on Wednesday, approaching $4,400 in early US stock trading. On Wednesday (September 2) at the New York close, spot gold was up 1.39%, at $4,389.36/ounce. In early Asia-Pacific trading up to 20:00 Beijing time, a daily bottom was formed—showing a W-shaped trend—followed by a notable upward rally. On the morning of September 3, spot gold stood above $4,400/ounce, up 0.3% on the day.

On the news front, according to data released by the ADP Research Institute on Wednesday, US private sector employment—often referred to as the “mini nonfarm report”—grew moderately in August. Private sector jobs increased by 38,000 last month, and July’s figure was revised up to 46,000. Economists surveyed by the market had previously expected a gain of 48,000 private jobs in August after an initially reported increase of 44,000 in July. The data suggests employers are still hiring, but the pace has slowed compared to the spring. August’s job growth marks the smallest monthly increase so far this year.

Shenwan Hongyuan Futures stated that the August ADP employment data fell short of market expectations, slightly weakening expectations of a rate hike in September, and driving a rebound in precious metals. The recent correction in precious metals has been suppressed by two factors: repeated US-Iran tensions and hawkish remarks from Waller. On one hand, renewed tensions between the US and Iran have pushed oil prices up sharply, reigniting inflation risks. On the other, Waller delivered hawkish remarks at the Jackson Hole Global Central Bank Conference, reviving expectations of a September rate hike. In the short term, the high volatility of US Treasury yields and the rebound of the US dollar index will continue to put pressure on precious metals.

Going forward, if August’s inflation and employment data exceed expectations—especially if inflation readings rebound—the probability of a rate hike will continue to rise. If economic data continues to weaken and expectations for a rate hike cool, gold prices may see a recovery. In the medium to long term, the repricing of US Treasury credit risk is pushing forward the trend of “de-dollarization,” the trend of global central banks buying gold remains unchanged, and the recurrence of geopolitical risks will continue to provide solid support for gold prices. The medium- and long-term price center of gold still has the basis and momentum for upward movement.

Editor: Zhu Henan