Gold (XAU/USD) price is attempting to extend its recovery as traders digest Wednesday's Automatic Data Processing (ADP) employment report.
With XAU/USD hovering near $3,350 at the time of writing, US President Trump's tax bill and interest rate expectations continue to drive demand for bullion.
The ADP Employment Change report for June showed that the private sector contracted in June.
Analysts had expected the June report to show that 95,000 jobs were added to the US private sector in May. Instead, a negative reading of 33K reflects potential weakness in the US labour market.
As a closely watched precursor to the Nonfarm Payrolls (NFP) report, the soft print has provided additional support for Gold.
As the Fed remains committed to monitoring the incoming employment and inflation data before reducing interest rates, this job report may influence the potential trajectory for interest rates.
On Tuesday, Fed Chair Jerome Powell stated at the European Central Bank (ECB) Forum on Central Banking in Sintra that "It's going to depend on the data, and we are going meeting by meeting." "I wouldn't take any meeting off the table or put it directly on the table. It's going to depend on how the data evolves," Powell added.
These comments suggest that the Fed is not rushing to cut rates, increasing the potential for a September interest rate cut.
Source: Fxstreet
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