01 JULY 2021

Gold Inches Up as Markets Await U.S Jobs Report Due Friday

Gold prices increased by 1.43% from its low of $1,753/oz, recovering most of its weekly losses. A strengthening U.S Dollar Index over the past 5 days created a strong headwind for gold – increasing 1% to reach a 1-month high of 92 – diminishing golds increase over the last 5 days.  

Treasury yields continued to decrease, falling 5.10% from its 5-day high. Declining Treasury yields decrease the opportunity cost of holding gold – a favorable environment for the safe-haven.   

Investors are anxiously awaiting the U.S Jobs report release on Friday – which will be the most important U.S economic data point of the month. The non-farm payrolls forecast is set at 700,000 compared to a rise of 559,00 in May. The unemployment rate is forecasted to drop from 5.6% to 5.8%.   

In the meantime, the inflation narrative continues as Claudio Borio, head of the economic and monetary department at the Bank for International Settlements, said in a recent interview that: “For those countries … that have been trying very, very hard to get inflation up unsuccessfully, having inflation persistently higher, roughly at target, that would actually be very good news and one should rejoice about that.” This comes after the inflation expectations of the eurozone came in just above their target at 2%.   
The yellow metal was last seen trading at $1,775/oz.

Jaco Lups