In the case of market sentiment for gold, it seems to oscillate between a glass-half-empty or glass that is half-full. Recently an extremely robust jobs report shifted market sentiment, not to half-empty but almost empty. Market sentiment is once again slowly shifting back to a glass-half-full.

It began on Thursday, August 5, the day following the release of ADP’s private-sector jobs report. This was the first day when gold traded on an intraday basis below its 100-day moving average, which is currently fixed at $1803. On Wednesday, August 4, gold futures traded to an intraday high of $1836.10 before settling, in essence, unchanged near the lows of the day.

                         "Oh my mama told me there'll be days like this" – Van Morrison

Immediately following the release of the U.S. Labor Department’s nonfarm payroll jobs report, we saw both gold and silver sell off sharply. Initial estimates by economists polled by Dow Jones were forecasting that July’s additional jobs would total above 800,000 individuals.

Unquestionably, tomorrow’s release of the U.S. Labor Department’s jobs report for July will be an important component that will shape and determine adjustments to the current monetary policy of the Federal Reserve. The Fed has underscored that their decisions in terms of when they will begin to taper, as well as normalizing interest rates, are tied directly to the state of the economy.

ADP released July’s jobs report, which indicated a dramatic decline from June to July. Private companies added only 330,000 jobs last month, falling far below the initial estimates of 653,000. Considering that private-sector jobs saw an additional 680,000 individuals added to the workforce in June, July’s number is the lowest number of jobs added since February 2021.

Ever since last Thursday when gold ran from $1806 to $1831 immediately following last month’s FOMC meeting gold has been consolidating with a definitive bias to the downside. However, recent action has been muted at best with small price changes from day to day, as well as from open to close.

While the undertones for gold are bullish, with lower yields on U.S. Treasury 10-year Notes and a lower dollar, it seems gold opened the trading month of August in a tepid manner. As of 4:50 PM EST gold futures basis, the most active December 2021 Comex contract is trading in a lackluster manner, down $0.70, and currently fixed at $1816.50.

The inflationary rate, according to the PCE (Personal Consumption Expenditures Price Index), the preferred inflationary index that the Federal Reserve uses, rose sharply to a 13 year high in June. However, it came in under analyst expectations and forecasts, which was one factor that took gold prices lower on the last trading day of July 2021.

Yesterday’s release of the Federal Reserve’s current monetary policy, coupled with statements made during the press conference by Chairman Powell, signaled a continuation of the extremely accommodative stance. The Fed vowed to continue to provide the support necessary to rebuild the U.S. economy.