Gold settles at highest level ever
|Gold has had things all its own way lately with pretty well every price driver in its favour ; however tomorrow it faces a real challenge with the release of the all important US jobs data. This will be a good test of sentiment and how gold behaves will give us a good indication just how much fuel it has in the tank regarding further gains.
Trump as been at pains to highlight that the last 2 non-farm payroll reports have been the strongest in US history. It us clear his re-election chances are linked to an economic recovery - and for that to happen, he needs to project a positive message about the economic outlook. Earlier this week on Fox News he boasted "big job numbers are coming on Friday."
Although gold has only half an eye on the US dollar (the dollar index just slipped to a 2 year low), strong employment figures should boost the greenback and by extension, gold should correct lower. The outcome depends less on the absolute number and more on the relative number compared to expectations. The consensus is around 1.6 million jobs gained in July, following a massive leap of 4.8 million in June 2020. The report will be released at 12:30 GMT tomorrow.
In the last 18 weeks 55.3 million Americans have lost their jobs which has erased a decade of growth. To put that in perspective, there have been over 330 layoffs for every COVID death in the US.
Whatever the outcome, we should be clearer about the strength of conviction of gold bulls. Should we see a figure below growth of 1.6 million jobs then you might add an extra one to that number in due course … Trump himself.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.