The gold price also was buoyed by ongoing sovereign debt concerns in Europe

The gold price pared its gains on Thursday after a better than expected report on the U.S. labor market.  The price of gold climbed as much as $13.34, or 0.8%, to $1,776.54 per ounce in overnight trading, but fell back toward $1,770 after weekly jobless claims dropped to more than a four-year low.

Financial markets across North America and Europe extended their gains following the weekly jobless claims data, which came in at 339,000.  In doing so, the figure fell to its lowest level since February 2008 and well below the 370,000 consensus estimate among economists.
However, the U.S. Labor Department noted that one state accounted for the large majority of the improved data and cautioned that investors and economists should not read too much into only this week’s data.  This announcement helped provide support for the price of gold, which generally moves inversely to U.S. economic data due to the Federal Reserve’s monetary stimulus response to such situations.

The gold price also was buoyed by ongoing sovereign debt concerns in Europe.  The latest disconcerting news was that Standard & Poor’s downgraded Spain’s credit rating from BBB-plus to BBB-minus, one level above junk status.  The downgrade came with a negative outlook, indicating an increased likelihood of a further downgrade in the near future.  The ratings agency cited elevated risks to Spain’s fiscal position, as the nation’s recession has limited the government’s ability to effectively respond to its struggling economy.

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