Will the price of gold continue to fall?
Source: China Gold Network
Independent Analyst
Currently, US inflation has been above the Federal Reserve’s 2% policy target for more than five consecutive years, and economic growth uncertainty has risen significantly. In May, the US non-farm payrolls increased by 172,000, compared to a market forecast of 88,000. The employment figures for March and April were revised up by a total of 93,000, with the employment growth rate over the past three months reaching its strongest in more than two years. The unemployment rate remained unchanged at 4.3%, and average hourly earnings rose 3.4% year-on-year. After the data release, the interest rate swap market priced in a Fed rate hike of about 24 basis points before the October meeting, and about 41 basis points cumulatively by the end of April next year. The probability of a 25 basis point hike within the year is now nearly fully priced in.
Certified Senior Gold Investment Analyst
The latest US non-farm payroll data was much better than expected, with 172,000 new jobs added—almost double the market expectation—and the unemployment rate remaining at a low 4.3%. This set of data has caused market expectations for a Fed rate cut to drop sharply, and expectations of high interest rates are again putting pressure on international gold prices. However, geopolitical tensions are still high, so risk-aversion sentiment continues to support international gold prices.
Researcher at Beijing Gold Economic Development Research Center
Looking ahead to this week, the market will shift focus to US inflation data. Fed rate hike expectations might further intensify, and international precious metals prices will come under greater pressure. Technically, international gold prices have broken below the 200-day moving average, and a bearish crossover of the 10- and 30-week moving averages signals further downside risk.
Zhaojin Refinery
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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