Gold price turned higher!

The gold price turned higher Thursday morning amid weakness in the U.S. dollar and a worse than expected report on the U.S. labor market.  The spot price of gold slid to $1,651.32 per ounce in overnight trading, but later jumped over $25 on an intra-day basis to trade at $1,676.53. Strength in the gold price was driven by the latest weekly jobless claims figures, which at 380,000 came in noticeably above the 355,000 consensus estimate among economists.  

In an interview with Bloomberg, 4Cast Inc. senior economist Sean Incremona stated that “On the back of last week’s employment report, this does suggest momentum in (the) labor market is slowing a bit.”  The U.S. Dollar Index declined 0.5% to 79.406 following the jobless claims data, which also provided a lift for the price of gold.

Commenting on the recent stretch of worse than expected employment data, Jeremy Friesen – a commodity strategist at Societe Generale – wrote in a recent note to clients that “If weak data continues, the Fed will have to intervene again to stimulate consumption…The next couple of years will be really challenging for global growth and central banks will be relied on as a crutch to get us through.”

Friesen provided additional remarks supportive of higher gold prices.  “On the public level, China’s central bank will continue to accumulate gold, which is easier than liberalising their capital account and currency.”

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more