By 3 Min Read(Recasts, adds analyst commentary, updates prices)* Investors anticipate Friday’s U.S. jobs data* Fed’s Barkin claims progress on the inflation target* According to analyst, gold will begin its downward trend this week. Reuters, June 29 – Gold prices sank to a more than one-week low on Tuesday, weighed down by the dollar’s advances and with attention shifting to the US employment data, which might provide a clearer picture of the Fed’s next monetary policy move. By 0832 GMT, spot gold was down 0.5 percent at $1,768.90 per ounce, after hitting a low of $1,766.20 earlier in the session, its lowest since June 21. Gold futures in the United States lost 0.7 percent to $1,767.80. “Due to gold’s persistent failure to break above the psychologically crucial $1,800 barrier, incoming labor market data, and inflation,” said Commerzbank analyst Carsten Fritsch. He said that the dollar’s strength was still hurting gold. According to a Reuters poll of analysts, the US Labor Department is projected to report a creation of 690,000 jobs in June, up from 559,000 in May, and an unemployment rate of 5.7 percent, down from 5.8 percent the previous month. Meanwhile, President Thomas Barkin of the Federal Reserve Bank of Richmond stated that the Fed has made “significant further progress” toward its inflation target in order to begin decreasing asset purchases. Although a rate hike by the Fed would increase the opportunity cost of owning metal and lessen its allure, gold is typically considered as a hedge against inflation. The dollar index increased by 0.2 percent, making gold more expensive for non-dollar holders. “This week could see more bearish pressure… Expect gold to resume its downward trend this week as risk sentiment rises and markets focus on the possibility of the Fed tightening monetary policy “In a note, OCBC Bank economist Howie Lee wrote. Silver was down 0.6 percent to $25.93 per ounce, platinum was down 1.2 percent to $1,076.87, and palladium was down 0.7 percent to $2,667.97 per ounce. (Arundhati Sarkar contributed reporting from Bengaluru, and Edmund Blair edited the piece.) Continue reading
