Gold flirting with session lows post impressive ADP report

Gold came under some fresh selling pressure during early NA session and has now dropped to session lows near $1262-63 region following the release of upbeat US labor market reports.

Today's stellar ADP report, showing private-sector employers added 253K new jobs during May reaffirmed underlying strength in the US labor market and raised expectations from Friday's official figures. The data lifted the US Dollar across the board and weighed heavily on dollar-denominated commodities - like gold. 

Adding to the upbeat data, comments from the Federal Reserve governor Jerome Powell that gradual rate-hikes would be appropriate now seems to have raised expectations for a tighter Fed rate-tightening cycle. The same is being reflected by a follow through up-surge in the US treasury bond yields, which eventually drove investors away from the non-yielding yellow metal.

Meanwhile, the prevalent risk-on environment, as depicted by positive trading sentiment around equity markets, did little to support demand for traditional safe-haven assets and stall the commodity's downslide.

The selling pressure, however, seems to have abated after slight disappointment from weekly jobless claims data, rising to 248K for the week ended May 26 as compared to 239K expected and previous week's 235K. 

Today's US economic docket also features the release of ISM manufacturing PMI, which would again help traders to grab some short-term trading opportunities. However, key focus would be on Friday's headline NFP print, which would be amongst one of the key factor determining the metal's near-term trajectory.