The week ahead: Equities and commodities

March 6, 2015 02:20 PM
Look Ahead: Equities and Commodities

Look Ahead: Commodities

Ahead of the US monthly jobs report on Friday, gold was hovering just above the $1,190 handle and was looking a little bit oversold after being down for five consecutive sessions. Most market participants were seemingly anticipating the jobs report to moderate slightly following the release of some mixed-bag labour market indicators for last month. For example, the employment component of the services sector PMI had surged nearly five points last month to 56.4 from 51.6 the previous month, while that of the manufacturing PMI had edged lower to 51.4 from 54.1 in January. The ADP employment report meanwhile had showed a moderate gain of 212,000 in non-farm private sector payrolls, which was more or less in line with the expectations. Thus taking all of these indicators into consideration, it would have not been unwise to expect a NFP print of around 240,000.

However the gain in nonfarm employment was significantly better. Some 295,000 jobs were added into the economy which pushed the rate of unemployment to just 5.5% from 5.7% previously. Although the growth in earnings was not as strong as had been expected, the dollar nonetheless rallied hard as speculators adjusted their expectations about the first rate hike from the Fed. As gold is priced in US dollars, the shiny metal plunged and broke though some key support levels.

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About the Author

Senior Technical Analyst for FaradayResearch. Matt has actively traded various financial instruments including stocks, options, and forex since 2005. Each day, he creates research reports focusing on technical analysis of the forex, equity, and commodity markets. In his research, he utilizes candlestick patterns, classic technical indicators, and Fibonacci analysis to predict market moves. Weller is a Chartered Market Technician (CMT) and a member of the Market Technicians Association.