Sudden spikes? Yes, please! Gold is above $1,800, finally!
Gold jumps on US holiday
On Monday, gold managed to surge a bit in the face of thin trade with Canadian and American financial markets unavailable due to Labor Day holidays.
December delivery gold futures jumped by 0.19% being worth $1,206.70 a troy ounce.
In August, gold recorded its fifth losing month in a row, losing about 7.6% year-to-date. The most popular precious commodity was suppressed by the soaring greenback as well as ascending interest rates. Market participants have also stayed away from gold notwithstanding an escalation in a global trade conflict, showing that gold might be losing its safe haven status because investors shift to the evergreen buck.
The previous week America managed to reach a deal with Mexico. The pact had to do with overhauling the North American Free Trade Agreement, although negotiations with Canada stalled some time before a Friday deadline. Additionally, the current presidential administration is ready to impose another round of duties on China’s products in a move, which could come already this week, thus escalating a trade war with China.
Without any economic reports because of the US holiday, market participants looked forward to the publication of the August nonfarm payrolls news on Friday. Apparently, the consensus estimate hints at the creation of 191,000 jobs in August, while the unemployment rate is believed to stand still at 3.9%.
With hopes pointing to another firm outcome for the American labor market, the news won’t probably move market expectations for the key US bank to have interest rates lifted by a quarter point at the next policy gathering on September 25-26.
Apparently, higher interest rates are prone to suppressing demand for gold that doesn’t bear interest, in favor of yield-bearing assets.
As for other commodities, silver futures managed to leap by 0.38% ending up with $14.535 a troy ounce.
Palladium futures declined by 0.01% trading at $965.90 an ounce. As for platinum futures, they gained 0.25% reaching $788.00.
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!