Gold and Nonfarm Payrolls


non farm payroll

The jobs market has become an area of key focus for investors and market participants since US Federal Reserve ties monetary policies with economic performance, such as the size of quantitative easing programme. For this reason and in this environment the market is particularly sensitive to significant NFP releases. In theory, they serve as a non farm payroll tool that, when correct, prevents reactionary swings in the market. More often however, traders capitalise on the disparity between forecasts and actual results, betting on potential price movements that may follow publication of NFP. In economics, an interest rate is the ratio in the mutual valuation of present goods against future goods.

Both are important yardsticks used by traders and analysts alike to get an insight into the health of the US economy. Specifically, the non-farm payrolls measure the number of people in employment in all businesses across the country, excluding agricultural, local government, private household and not-for-profit sectors. An expected change in payroll figures causes a mixed reaction in the currency markets. If the unemployment rate drops or manufacturing payrolls rise, currency traders will side with a stronger dollar, which is a positive for the U.S. economy. If the unemployment rate increases and manufacturing jobs decline, investors will pass on the U.S. dollar for other currencies. Still, the number would point to a tight labor market with job gains above the monthly average of 167,000 in the 2010s, pushing employment about 500K higher from its pre-pandemic level.

Nonfarm payrolls

You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. While this strategy can be very profitable, it has some pitfalls to be aware of.

non farm payroll

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair’s reaction to the previous 26 NFP prints. The CurrencyTransfer recommendation would be to consider hedging your currency exposures. By speaking to our team of Payment Specialists, they can be your eyes and ears in the currency market. By setting up market orders, rate alerts, and booking forward contracts via our Network of FCA regulated payment providers, we can help you significantly reduce your business risk exposures. There are dozens of indicators that can be examined when considering currency exchange.


The NFP is a part of the monthly Employment Situation Report that estimates the number of jobs gained in the U.S. in the previous month. A better-than-expected NFP number may be beneficial for the Canadian dollar as well, as the Canadian economy is strongly tied to the US economy.

  • Gold had served as money for thousands of years until 1971 when the gold standard was abandoned for a fiat currency system.
  • This reading followed August’s increase of 315,000 and came in better than the market expectation of 250,000.
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  • Manufacturing added 22K jobs, leisure and hospitality 31K, following average monthly gains of 90K in the first 7 months of the year.
  • The Federal Reserve System, or sometimes referred to as “the Fed” is the central bank of the United States.
  • Nonfarm payroll statistics also show which sectors are expanding and contracting.

The growth of 678,000 new jobs seen in Feb of 2022 is a good sign , especially as estimates only predicted a growth of 400,000. Because NFP presents a relatively straightforward set of data, one might assume that it’s safe to make accurate future predictions based on the news. Stock Market Index – A strong dollar can negatively affect US stock market indices such as Dow Jones and the NASDAQ. NFP covers about 80% of the workers who contribute to Gross Domestic Product and it provides a strong indication over the health of the US economy. You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.