Gold prices paid little attention to the mixed bag of US data releases yesterday, opting to consolidate in a now-familiar range that has contained prices following a sharp plunge earlier in the week. The ADP estimate of US jobs growth undershot expectations but the ISM measure of service-sector activity growth vastly outperformed.

Crude oil prices attempted a spirited recovery, hitting an intraday high as weekly EIA inventory flow data echoed API estimates with a larger-than-expected drawdown, but the onset of risk aversion undermined momentum. Indeed, the WTI would go on to erase earlier gains, falling alongside the S&P 500 to finish the North American session with a loss.

The spotlight now turns to the official set of US employment statistics. Payrolls growth and wage inflation are expected to accelerate in June while the jobless rate remains unchanged at 4.3 percent. On balance, US economic news-flow has narrowly improved relative to forecasts over the past three weeks. A jobs report extending this pattern may stoke Fed rate hike speculation, sending gold lower.

Firming US tightening bets may also punish crude oil. Shares have moved lower as the rate hike path implied in Fed Funds futures steepened over the past three weeks. This hints that firming confidence in continued stimulus withdrawal following upbeat payrolls data may (somewhat counterintuitively) sour risk appetite, weighing on sentiment-linked energy prices.

Commentary from the sidelines of the G20 leaders’ summit in Hamburg, Germany are something of a wildcard. News coverage has focused on the first face-to-face meeting between Russian President Vladimir Putin and his US counterpart Donald Trump due to take place at the gathering. Insights on a slew of other major themes including Brexit and FX policy may also cross the wires however.

GOLD TECHNICAL ANALYSIS – Gold prices continue to mark time above support at 1214.40, the May 9 low. A break below this on a daily closing basis exposes the 1195.13-99.67 area (March 10 low, 38.2% Fibonacci expansion). Alternatively, a rebound back above the 23.6% level at 1236.51 targets the 14.6% Fib at 1259.22.