The value of Gold slumped within the wake of stronger-than-expected US employment development in June, however the losses have been restricted, Commerzbank’s Head of FX and Commodity Analysis Thu Lan Nguyen notes.
Setback for Gold is prone to be short-lived
“A more in-depth take a look at the labour market report revealed some weaknesses. A lot of the employment development was within the public sector, which may very well be as a result of technical components and will result in a countermovement within the coming month. Nevertheless, the slight decline within the unemployment price is a constructive signal.”
“This could make the US Federal Reserve optimistic that the uncertainty surrounding US tariff coverage has not but affected firms severely. We due to this fact proceed to imagine that the Fed will take its time earlier than slicing rates of interest. That is creating headwinds for Gold in the meanwhile.”
“Nevertheless, the primary issue supporting the dear steel is just not the prospect of rate of interest cuts, however above all of the damaging US coverage, which is eroding investor confidence in secure US belongings. Except the US authorities makes a U-turn, yesterday’s setback for Gold is prone to be short-lived.”
