Gold price higher after non-farms meets forecasts
London (Aug 7) Gold rallied a touch even though the non-farm payroll showed another steady month for jobs creation in the US.
An hour into US trading, spot gold was US$6 higher at US$1,095
Gold rallied a touch even though the non-farm payroll showed another steady month for jobs creation in the US.
Ahead of the numbers, the metal was heading for a seventh weekly fall, its worst slump since 1999 or 2004 depending on which newswire you read.
The US economy created 215,000 jobs in July and while slightly below forecasts it was strong enough to spark renewed speculation that interest rates will rise in September.
French bank Natixis summed up the bear case by suggesting that five things that had boosted demand have now disappeared.
“Western ETF investing, net demand from central banks, weak Indian buying, the end of US quantitative easing, and now the weakening of demand in China – "the buyer of last resort" when prices crashed in 2013.”
It expects US rates to start to rise from September.
Technical analysts also expect gold to drop further. Scotiabank said: “This may be the calm before the storm with probability calling for another leg lower to 2010 low of US$1,044. Only a close above US$1,110 turns the bearish market.”
Even so, an hour into US trading, spot gold was US$6 higher at US$1,095, silver had risen a few cents to US$14.86 while platinum added US$1 to US$949.