After U.S. jobs statistics last week raised questions about the health of the labour market and made investors less confident in the Federal Reserve’s plan to raise interest rates, gold prices were little changed on Monday.
By 0347 GMT, spot gold was stable at $1,923.62 per ounce. The price of U.S. gold futures was $1,929.50 per ounce, down 0.2%.
The U.S. economy created the fewest jobs in 2-1/2 years in June, according to the Labour Department’s widely watched employment report released on Friday, but continuing robust pay growth indicated that labour market conditions remained tight.
According to Nicholas Frappell, global head of institutional markets at ABC Refinery, “the non-farms were less eventful than the prior ADP (employment data), but importantly, don’t seem to challenge expectations around a July hike by the Fed.”
I think it would take a significant miss in the next CPI statistics on July 12 to change my opinion.
Since bullion doesn’t pay interest, rising rates have a negative impact on the price of gold.
Since early May, when prices were at nearly record highs, prices have fallen over 7% as investors have reduced their views of the U.S. Federal Reserve’s rate-hiking cycle coming to an end.
A poll by Invesco of central banks and sovereign wealth funds, which was released on Monday, revealed that more nations are returning their gold stockpiles as a hedge against the kind of sanctions the West imposes on Russia.
According to data released on Friday, COMEX gold speculators increased their net long position during the week ending July 3 by 12,733 contracts, reaching 99,205.
The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased 0.3% on Friday.
Other precious metal prices were stable at $23.05 per ounce for spot silver, $907.34 for platinum, and $1,238.86 for palladium.