NFP Data Shocks, Gold Immediately Falls!
Gold prices fell sharply on Thursday (3/7) after the US employment report for June showed results that were much stronger than expected. The data showed that around 150,000 new jobs were created, beating market expectations of 110,000. Anyone who expected the Federal Reserve to cut interest rates in the near future is now starting to doubt. Why? Because this high employment figure strengthens the view that the US economy is still quite solid and does not need additional monetary easing. Gold, which usually rises when interest rates fall, has actually corrected from $3,365 to $3,320 per ounce.
In addition, investors are also watching the latest news from Washington. The House of Representatives is expected to soon pass President Trump's massive tax and spending bill, which could keep the deficit high in the long term. On the other hand, trade negotiations between the US and its main partners are still facing obstacles, although tariffs for Vietnam have been reduced to 20%. What impact will this have on the market? The combination of strong jobs data and easing fiscal risks has seen gold lose its appeal as a hedge—at least temporarily.
Source: (ayu-newsmaker)
