Gold Rises Despite Strong JOLTS Data.
Gold prices strengthened in today's trading despite the JOLTS Job Openings data showing an increase in the number of job openings in the US. In theory, stronger employment data should have strengthened the dollar and put pressure on gold prices.
However, the market did not react according to the textbook because investors judged this increase in JOLTS to be insufficient to alter expectations regarding Federal Reserve policy. With inflation tending to moderate and dovish comments from several Fed officials recently, the market still views the possibility of an interest rate cut as the dominant scenario. This sentiment provides room for gold to continue its rally.
Another factor contributing to gold prices was the weakening of US bond yields after the data release, indicating that market participants were not yet fully convinced that stronger employment conditions would curb plans for monetary easing.
Lower yields reduce the opportunity cost of holding gold, thus increasing demand for this safe-haven asset. Furthermore, global uncertainty and the potential for risk-off, both from a geopolitical perspective and trade tensions, are encouraging investors to increase their gold positions as a hedge.
This combination of fundamental factors, policy expectations, and more complex market dynamics is what enabled gold to strengthen even though the JOLTS data appears bullish for the dollar.
Source: Newsmaker.id
