Gold prices is stable on Monday, as the spot price stands at $1319.30 per ounce in the European session. Thursday's strong employment numbers have bolstered the dollar and weighed on the precious metal. It's a quiet start to the week, with no US releases on Monday.
US employment numbers were the perfect prelude to a long holiday weekend in the US, as Nonfarm Payrolls and the Unemployment Rate sparkled. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. Unemployment Claims was steady at 315 thousand, almost replicating the estimate of 314 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.
As widely expected, the ECB maintained the benchmark interest rate at 0.15% at its July policy meeting. This was is sharp contrast to the previous meeting, in which the ECB lowered the benchmark rate from 0.25% and introduced negative deposit rates for the first time. At this week's meeting, ECB head Mario Draghi noted that inflation rates remain very low, and said that the ECB was ready to implement "unconventional instruments" if necessary. As well, Draghi reiterated that the ultra-low interest rates would remain at current levels or lower for the foreseeable future.
XAU/USD 1319.30 H: 1323.20 L: 1318.60
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