Gold Lower But Trading Above 1215 Level
Frankfurt (Jan 12) Gold has posted slight losses on Monday, trading at the spot price of $1219.73 per ounce in the European session. Gold posted strong gains to end the week, as the metal trades comfortably above the key line of $1200. On the release front, the only data release out of the US is the Labor Conditions Market Index. As well, FOMC member Dennis Lockhart will deliver a speech in Atlanta.
US releases wrapped up the week in fine fashion, as employment data shined. Nonfarm Employment Change, one of the most important indicators, posted a gain of 252 thousand, easily beating the estimate of 241 thousand. The unemployment rate fell to 5.6%, edging below the forecast of 5.7%. Meanwhile, Average Earnings dropped 0.2%, its first decline since July 2013. A lack of wage pressure means that the Fed may be able to postpone a rate hike until the second half of 2015.
The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises for the markets. There had been plenty of speculation that the insertion of the word “patience” in the previous policy statement signaled a more aggressive monetary stance. However, the minutes stated that Fed members remained of the view that Fed policy had not changed, and that a rate hike was unlikely before April. Although economic growth continues to improve, inflation remains at very low levels, which means that the economy is in no danger of overheating, so there is no immediate need for a rate increase.