A quick recap on oil, employment figures, the fed, and the precious yellow metal.

Oil

It’s been a tough week for oil prices as prices drop intensely, on the back of a surprise 3.6-million-barrel build in U.S. Crude stockpiles vs expectations of a 2.9 million and concerns of the coronavirus delta variant dimming fuel demand prospects.

Whilst there are Middle East tensions going on, oil prices are still dipping. With Brent at 71 dollars per barrel and WTI going back below the 70 mark at 69 dollars. OPEC+ latest decision to increase output to 400,000 BPD has also pressured oil prices through a downtrend.

*WTI Chart on the daily frame*

*Brent chart on the daily frame*

Non-Farm Employment change

The ADP reported on Wednesday, a rise of only 330K private sector employment vs the 690K expected weighing on the stock market. Energy stocks were the biggest loser shortly after the report losing out on more than 2%.

Markets now tune in to Friday’s Non-farm payrolls that will guarantee a bigger picture perspective on the labor market and will ultimately affect the Fed policy due next month in September. With lower-than-expected ADP figures, investors aren’t very optimistic.

The Fed had previously mentioned that they are waiting for the labor market to reach the central bank’s target along with higher inflation and only then hiking rates would be due.

Investors also tense up after Fed member Richard Clarida speaks on hiking rates unsettling markets. Clarida also spoke about scaling back bond purchases this year and mentioned that hiking rates is due next year.

Gold

Gold touches $1,831.57 yesterday on Middle East tensions and lower ADP figures but drops straight after to $1,806.35 and steadies at $1,809. The yellow metal has been hit by facts and figures from financial markets unable to hold it together. It seems like it touched a high and then was hit by a sell-off real quick. Especially after two opposing figures negative ADP vs positive ISM services purchasing managers index.

Non-Farm Payroll data will certainly set the tone on the safe-haven metal.