Gold Rises Shyly, What Are Investors Actually Waiting For?
Gold prices rose slightly on Monday (06/30), driven by a weakening US Dollar. Spot gold strengthened 0.3% to $3,284.49 per ounce after touching its lowest level in more than a month earlier in the session. Although risk appetite in the stock market is increasing, gold's appeal remains strong as investors await US jobs data that could determine the direction of the Fed's interest rates going forward.
What caused the increase in gold this time? The weakening dollar is the main factor. Because gold is priced in US Dollars, when the dollar falls, gold prices become relatively cheaper for buyers from outside the US. In addition, President Donald Trump's statement that continues to encourage the Fed to cut interest rates also makes the market increasingly confident that the cut could happen sooner.
However, gold's increase is still limited because global stock markets are also rising, driven by easing tensions in the Middle East and good news from US-Canada trade negotiations. Canada even canceled a digital services tax as part of an effort to smooth talks. This increased the risk appetite of investors who had switched to safe havens such as gold.
Where is gold headed next? All eyes are now on US jobs data, specifically Wednesday’s ADP report and Thursday’s nonfarm payrolls. If the data is weak, the chances of the Fed cutting rates will increase. And as we know, lower interest rates are usually good news for gold, as the metal doesn’t provide the yields that bonds do.
Source: (ayu-newsmaker)
