Latest positive US jobs report fails to affect flat gold price
Gold prices remained mostly flat on Monday, despite even as analysts suggestions that the yellow metal will reflect the fact that the latest US payrolls report supported beliefs that the Fed could hike interest rates as early as September.
The precious metal dropped for a seventh week in a row last week, its longest such retreat since 1999, having struggled to distance itself from a 5-1/2-year trough of $1,077 reached during a late rout in July.
Today, however, spot gold was up 0.15% in New York at $1,095.70 an ounce by 08:54 am ET, recovering from an early low of $1,089.40.
The U.S. added 215,000 non-farm payrolls in July, less than the 223,000 increase economists had predicted, but still seen in line with a tightening labour market. Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported.
Prices of the metal have been fallen in the second half of this year as the prospect of a rate rise, the first since 2006, would lift the opportunity cost of holding bullion.
The Federal Reserve’s number-two official Stanley Fischer said in a Bloomberg TV interview Monday morning that the U.S. economy is nearing full employment and although inflation is presently low, that’s just temporary due to falling commodity prices. He said the Fed should still be vigilant on inflation. He said the Fed has been extremely expansionary in its monetary policy. These remarks fall into the camp of the U.S. monetary policy hawks.