Despite a two -day impressive rally, the gold prices finish the week straight after the US May employment report succeeded in keeping the negative views on the future of the economy. As we have reported as Kriptokoin.com, the gold market has reached the new daily low levels on Friday, with the digestion of 390,000 increase in the US non -agricultural payrolls against the expected 328,000.
If the data remains constant for a long time, gold prices may fall below this level.
Bart Melek, Head of the Global Commodity Strategy of TD Securities, told Kitco News in his statement:
The May Employment Report is moderate in economic acceleration. However, the sharp decreases expected by the market recently seem to have not occurred. In the margin, this means that the market can increase interest expectations. As a matter of fact, the rates (nominal and real) rose along the curve after the report. This helped to fall below the gold below $ 1,860, and fell from about $ 1,863-66 / ounce before the report was published.
For gold, optimistic employment figures mean that the Federal Reserve may remain aggressive with 50 basis points increases in June and July, which focuses on valuable metal. Bart Melek continues to explain his views with gold prices with the following words:
The markets may have been a little early to make the assumption that the FED will not be so aggressive. We will not know this for a while. So far, the economic data is complete. We decide that this report should withdraw prices to 200 DMA ($ 1,842) with future additional data showing a stable economy. If the data remains constant for a long time, wages remain as bids, gold prices are likely to fall below $ 1,800 / ounce. Price prints are manifested in the services that collect inflation with delay. Therefore, input costs from energy to labor costs will emerge. The price index will be stubbornly high for a while… From the perspective of the Central Bank, they have to continue this tightening policy.
Optimistic data removes from gold investment
Oanda Senior Market Analyst Edward Moya said that more optimistic data has removed the safe port trade, but negative estimates would focus on risk sensitivity in the long run and added:
Gold prices fell after a strong non -agricultural payroll report sent the dollar higher. Investors were expected to see a stronger slowdown with the increase in employment, which enabled the Fed to move away from a half -point interest rate hike in September (each of which is expected to be 50bps in June and July. The economy does not soften quickly and this eliminates the need for safe ports today… Increased gloomy calls should continue to support the valuable gold in the short term.
According to Gainesville Coins, Dear Metals Specialist Everett Millman, high inflation will support gold prices this summer because investors choose to get rid of “bad money ve and“ good money ”. However, according to Millman, the aggressive stance of the FED is still a downward risk for gold… Millman added that he had underlined the stagnation warnings at the level of $ 1,800. The expert conveys his opinions as follows:
This week, $ 1,850-65 from stubborn resistance levels to key support levels for gold price. The increasing global demand for gold reflects a deep -rooted economic principle, the Gresham Law, ”Bad money expels good money.” If you have bad money that loses its value, you want to spend as quickly as possible. Gold is good money, it is difficult money and there is an incentive to hold it… Considering that gold, stocks and sales in crypto, there is a preferred value store… We cannot ignore that QT and rising interest rates will pull down in the near term… The next lock level for the break of gold. If gold fails for $ 1,900, the rest of the summer will continue to be traded in the middle of $ 1,800… Jamie Dimon’s economic ‘hurricane’ interpretation, Yellen admitted that she was wrong about inflation. These are not the kind of interpretations that occur when the economy is strong. In any stagnation environment, when people are worried about losing their jobs or the value of their reserves, gold is a logical place for protecting the value of money.