Financial Associated Press, December 5th Although the U.S. non-agricultural data exceeded expectations last week, the U.S. dollar continued to depreciate on Monday, and gold prices climbed to The highest level since July this year.
As of press time, spot gold rose 0.17% to above $1,800 an ounce, having previously reached its highest level since early July this year. The dollar index fell 0.24% to 104.24, its lowest level since late June. In addition to gold, prices for palladium, silver and platinum also rose.
Fed still slowing rate hikes
Since the beginning of this year, due to the continued aggressive interest rate hikes by the Federal Reserve, gold prices have continued to suffer. But recent signs that the Fed’s hawkishness is weakening have boosted gold prices, which topped $1,800 an ounce last week.
Although gold fell below that level again after the release of the U.S. non-farm payrolls report last Friday as the data beat expectations, on Monday, bets on China’s economic recovery weighed on the U.S. dollar, pushing it up again. up the price of gold.
Gold tends to be negatively correlated with the U.S. dollar and Fed rates because gold is denominated in U.S. dollars and a low interest rate environment tends to mean that the opportunity cost of holding non-yielding assets like gold is lower.
Nicholas Frappell, global head of institutional markets at ABC Refinery, said that strong U.S. employment data and wage pressures have reduced resistance to the Fed’s sharp interest rate hikes. In’ feeling.”
Data on Friday showed U.S. nonfarm payrolls beat expectations in November and average hourly earnings rose strongly, easing fears of a deepening recession.
But that still may not stop the Fed from slowing the pace of rate hikes starting this month: Market participants now see a 91% chance of a 50 basis point hike at the Fed’s meeting this month.
Gold prices were supported by markets still expecting the Fed to slow down its tightening pace, City Index analyst Matt Simpson said of the strong non-farm payrolls data. In addition, news that China has optimized its response to the new crown epidemic means that domestic demand for gold will increase, further supporting prices.
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