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Gold dives on strengthening US currency
On Friday, gold declined in the face of the ascend of the evergreen buck after the report on employment in the United States that turned out to be better than the estimates of experts.
Gold futures declined approximately 0.48% displaying a reading of $1293.9 per troy ounce.
As follows from the report of the US Department of Labor, in May, the overall number of folks employed outside the agricultural sector tacked on by 223 thousand people. Market experts predicted that in May up to 189 thousand jobs will be created in the United States. Evidently, the report of the US Department of Labor happened to be better than the report of ADP that on Wednesday informed about the creation of up to 178 thousand jobs.
The employment report is thoroughly analyzed by the key US bank as a guide to the ascend of inflation provoked by the soar of wages. Moreover, it enables market analysts to evaluate progress in achieving one of the major objectives of the Federal Reserve - the maximum possible employment of the US population.
In March, the major US financial institution had the interest rate lifted and forecast two more of its hikes by the end of 2018.
Predictions for a higher interest rate tend to underpin the American currency because they make dollar assets more attractive to profit-seeking traders. A faster soar in the interest rate becomes rather a negative factor for the number one precious commodity, whose owners don’t get interest. Each time the cost of borrowed funds is going up, it’s difficult for the yellow metal to take on high-yield assets.
Gauging the purchasing potential of the American currency versus a bunch of main currencies, the US dollar index went up about 0.32% being worth 94.25.
Silver futures dipped 0.11% hitting $16.44 per troy ounce.
Read a short market wrap before trading today!
The United States will publish the non-farm employment change, also known as non-farm payrolls or NFP at 15:30 MT (GMT+3) time on August 6.
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