Gold Rebounds After a Decline: What’s Happening with Precious Metal Prices
10 August 15:12
On Monday, August 10, the price of gold stabilized above $4,300 per ounce, as investors assessed the unexpected contraction in the U.S. labor market, which dispelled fears of interest rate hikes, "Komersant Ukrainian" reports, citing Bloomberg.
Gold bars were trading around $4,340 per ounce and remained above their 50-day moving average after jumping more than 7% last week—the largest gain since late January.
Data released on Friday showed that U.S. employers cut jobs in July, while the number of employees hired in the previous two months was revised downward. Additional clues regarding the Federal Reserve’s interest rate path will come from inflation data to be released later this week.
“Gold prices continue to be supported by last week’s positive momentum following the U.S. jobs report, which disappointed the market and led to a softening of expectations for further Fed rate hikes,” said Ricardo Evangelista of ActivTrades.
Investors are now awaiting U.S. consumer price data on Wednesday, as well as producer price data on Thursday.
“If the headline inflation rate comes in below the consensus forecast —at 3.4%—could further dampen expectations of a Fed rate hike by the end of this year, weakening the dollar and creating upside potential for gold,” Evangelista said.
Meanwhile, markets continue to monitor developments in the Middle East. Iran reported that negotiations with Oman on an agreement regarding the Strait of Hormuz are in the final stages, but reiterated that the U.S. must fulfill a number of conditions before traffic can resume through this strategically important waterway.
Palladium fell 1.56% to $1,356.47 per ounce, while silver rose 0.77%, trading at $64.04 per ounce. The price of platinum fell 0.57% to $1,735.06.
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