Gold futures hit session highs after ADP jobs report disappoints

Gold prices hit the highest levels of the session on Wednesday, after data showed that U.S. non-farm private employment rose less-than-expected in February, fuelling concern over the U.S. labor market.

Gold hits session high after downbeat ADP jobs data

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery held in a range between $1,332.90 a troy ounce and $1,339.60 an ounce.

Prices last traded at $1,338.80 an ounce during U.S. morning hours, up 0.1%, or $0.90 cents. Gold futures lost 0.92%, or $12.40 an ounce, to settle at $1,337.90 on Tuesday.

Prices were likely to find support at $1,319.30 a troy ounce, the low from February 28 and resistance at $1,355.00, the high from March 3.

Meanwhile, silver for May delivery added 0.45%, or $0.09 cents, to trade at $21.31 a troy ounce. The May contract ended Tuesday’s session down 1.22%, or $0.26 cents, to settle at $21.22 an ounce.

Payroll processing firm ADP said earlier that non-farm private employment rose by a seasonally adjusted 139,000 last month, below expectations for an increase of 160,000.

January’s figure was revised down to a gain of 127,000 from a previously reported increase of 175,000.

While not viewed as a reliable guide for the government jobs report due on Friday, March 7, it does give guidance on private-sector hiring.

Market players now looked ahead to the ISM’s report on service sector activity.

A recent series of disappointing U.S. economic indicators have sparked concerns that the recovery has lost momentum since the end of last year as inclement winter weather weighed on growth.

Elsewhere on the Comex, copper futures for May delivery inched up 0.05% to trade at $3.216 a pound, as China’s National People’s Congress annual meeting kicked off earlier in the day.

China set its gross domestic product growth target for 2014 at 7.5%, as widely expected, and will keep consumer inflation at 3.5%, Chinese Premier Li Keqiang said on Wednesday.

The latest meeting of the legislature, the first to be overseen by President Xi Jinping and Premier Keqiang, comes amid lingering concerns over the health of the country’s economy.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

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U.S. ADP non-farm payrolls rise by 139,000 in February

U.S. non-farm private employment rose less-than-expected in February, fuelling concern over the U.S. labor market, industry data showed on Wednesday.

U.S. ADP non-farm payrolls rise less than expected in February

In a report, payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 139,000 last month, below expectations for an increase of 160,000.

January’s figure was revised down to a gain of 127,000 from a previously reported increase of 175,000.

While not viewed as a reliable guide for the government jobs report due on Friday, March 7, it does give guidance on private-sector hiring.

Following the release of the data, the U.S. dollar erased gains against the euro to trade higher, with EUR/USD adding 0.02% to trade at 1.3745, compared to 1.3736 ahead of the data.

Meanwhile, U.S. stock index futures remained modestly higher. The Dow Jones Industrial Average futures indicated a gain of 0.1% at the open, S&P 500 futures pointed to a rise of 0.1%, while the Nasdaq 100 futures indicated an increase of 0.1%.

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Italian services PMI rises to 35-month high of 52.9 in February

Service sector activity in Italy expanded at the fastest pace in almost three years in February, easing concerns over the economic outlook of the euro zone’s third-largest economy, data showed on Wednesday.

Italian services PMI climbs to almost 3-year high in February

In a report, market research group Markit said that its Italian services purchasing managers’ index rose to a seasonally adjusted 52.9 last month from a reading of 49.4 in January. Analysts had expected the index to inch up to 49.8 in January.

A reading above 50.0 on the index indicates industry expansion, below indicates contraction.

Commenting on the report, Phil Smith, economist at Markit said, “These figures, alongside the sister survey data that showed continued growth in manufacturing, support the notion that Italy will see back-to-back quarterly increases in GDP.”|

Following the release of the data, the euro was little changed against the U.S. dollar, with EUR/USD easing up 0.01% to trade at 1.3742.

Meanwhile, European stock markets were mixed after the open. Italy FTSE MIB 40 rose 0.5%, the EURO STOXX 50 added 0.25%, France’s CAC 40 dipped 0.1%, London’s FTSE 100 edged down 0.15%, while Germany's DAX added 0.1%.

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European stocks slip lower after Spain services data; Dax down 0.19%

European stocks slipped lower on Wednesday, after the release of downbeat Spanish service sector activity data, although lowered concerns over tensions between Ukraine and Russia still lent some support.

Frankfurt Stock Exchange

During European morning trade, the EURO STOXX 50 edged down 0.14%, France’s CAC 40 shed 0.28%, while Germany’s DAX 30 slipped 0.19%.

Markit research group said Spain's services purchasing managers' index fell to 53.7 in February, from a reading of 54.9 the previous month. Analysts had expected the index to rise to 55.0 last month.

Market sentiment recovered on Tuesday, as the threat of war between Russia and Ukraine eased after Russian President Vladimir Putin said a military deployment in Ukraine is not needed now. Russia’s defense minister also ordered troops engaged in military exercises close to Ukraine’s borders to return to their bases.

But investors still remained cautious with Russian forces still maintaining a military presence in Ukraine’s Crimea region.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale climbed 0.74% and 1.11%, although Germany's Deutsche Bank dropped 0.50%.

Among peripheral lenders, Unicredit and Intesa Sanpaolo advanced 0.79% and 1.84% respectively, while Spanish banks Banco Santander and BBVA gained 0.51% and 0.85%.

Elsewhere, Paris-based Carrefour jumped 1.88% after it reported a 9.8% increase in annual earnings.

On the downside, Adidas slipped 0.25% after saying 2014 will be "significantly impacted" by currency effects, although the sporting-goods maker reported fourth-quarter profit that beat analysts’ estimates.

In London, FTSE 100 fell 0.30%, weighed by losses in Legal & General Group, down 1.81%, after the manager of U.K. pension assets raised its dividend 22% after saying cash flow and operating profit increased.

Meanwhile, financial stocks were mostly lower. Lloyds Banking dipped 0.01% and Barclays eased 0.06%, while HSBC Holdings declined 0.42%. The Royal Bank of Scotland overperformed however, edging up 0.09%.

In the mining sector, stocks were mixed as Vedanta Resources rose 0.33% and Glencore Xstrata climbed 0.57%, while Vedanta Resources and Polymetal tumbled 1.64% and 2.25% respectively.

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.02% dip, S&P 500 futures signaled a 0.03% loss, while the Nasdaq 100 futures indicated a 0.03% gain.

Later in the day, the euro zone was to release data on retail sales. The U.S. was to produce the ADP report on private sector job creation, while the Institute for Supply Management was to publish a report service sector activity.

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Forex Trading Signal for 5th March 2014

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

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EUR/USD

 Down Trend :

 (1) SELL

Entry Point: 1.37775

Take Profit: 1.37575

Stop Loss:   1.38100

 

GBP/USD

Down Trend:

(1) SELL

Entry Point: 1.66800

Take Profit: 1.66600

Stop Loss:   1.67200

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