Gold Prices at 7-Month Lows as Greenback Shows Broad Strength
Frankfurt (Sept 12) Gold has been heading south all week, and the downward trend has continued on Friday, as the metal broke through support at $1240. In the European session, the spot price stands at $1237.38 per ounce, the metal's lowest level since January. Taking a look at Friday's fundamental events, In the US, it's a busy day with the release of three major events - Retail Sales, Core Retail Sales and UoM Consumer Sentiment.
US employment data disappointed on Thursday. Unemployment Claims rose to 315 thousand, the largest number of claims in 10 weeks. The reading was much higher than the estimate of 306 thousand. This follows soft numbers from JOLTS Job Openings and a dismal Nonfarm Payrolls last week. The troubling job numbers are unlikely to affect the Fed's plan to continue trimming QE next week, but a weak labor market could postpone plans to raise interest rates by mid-2015.
After months of fighting in eastern Ukraine between government forces and pro-Russian fighters, a week-long ceasefire appears to be holding, although some sporadic fighting has been reported. Russia has denied assisting the rebels, but both Ukraine and NATO have said that Russian forces are in Ukraine and have taken part in the fighting. The crisis has severely strained relations between the West and Russia, and trade between Europe and Russia has suffered as a result. On Thursday, European countries and the US slapped further sections on Russia, which they said would be cancelled if the ceasefire continues to hold.