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The price of gold is under pressure before the US releases its telling jobs data

by , 04 April 2014

Gold has struggled in the build up to today's release of US non-farm payrolls. Analysts view this jobs data as a major indicator of economic health in the US. There's a growing consensus that the US economy is recovering. This is denting demand for gold, seen as an investor safe haven. Let's take a closer look at what's going on with the gold price…

The gold price is drifting lower

Early this morning, gold continued to lose value as “the market nervously awaited US non-farm payrolls data,” says BDLive. Gold looks set to hit its “longest weekly losing streak in more than six months”.

Gold futures have fallen “for the sixth time in seven sessions,” notes Bloomberg.

Investors are interested in today’s US jobs report as they’re desperate to gauge the health of the US economy, says Fin24. What’s contained in this report could have a bearing on what the US Federal Reserve does with its stimulus programme.

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The gold price will take its cue from US non-farm payrolls data

A survey of economists conducted by Bloomberg on the expected jobs number showed an average forecast of 200,000. If this is the case, this would be the largest rise in non-farm payrolls since November last year.

In mid-March, the chairwoman for the Fed, Janet Yellen, said the “central bank may end bond buying” by spring, says Bloomberg. This would bring an end to the stimulus programme. And Ms Yellen said that six months after that, interest rates would likely rise.

If the jobs data comes out less than forecast, there’s a chance that gold will take support from this, says Fin24. Phillip Futures’ analyst Joyce Liu says if this is the case, “it is unlikely prices will break above $1,300”. But Ms Liu says if the data is strong, then gold could “potentially break below $1,276”.

With the non-farm payrolls data due out this afternoon, time will tell how gold reacts.



The price of gold is under pressure before the US releases its telling jobs data
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