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XAU/USD: Gold rose in price _06/06/2016

Technical analysis and trading recommendations -

Overview and Dynamics

The disappointing data on US NFP May, the publication of which was held last Friday, led to a sharp weakening of the US dollar in the currency market. The number of jobs outside agriculture rose by 38 000 in May (forecast was 164 000). May job growth the weakest since September 2010.

Spot price of gold on Friday exceeded the mark of $ 1240.00 per ounce. Quotes August futures for gold at the end of trading on the COMEX rose 2.5% to 1242.90 dollars per troy ounce, showing the most significant increase in daily from 17 March.

Today the attention of market participants will be focused on the performance in the 16:30 (GMT) Fed chief Janet Yellen, in which it will affect the topic of monetary policy in the United States in light of the on the US labor market data. Interestingly, the Federal Reserve Bank of Boston President Eric Rosengren said on Monday that, despite the slowdown in the number of jobs, he still expects to increase interest rates in the US in the next few months.

He noted that although job growth in May to 38,000 is "disappointing results", the current unemployment rate of 4.7% "corresponds to his concept of full employment," and with a further fall in unemployment, inflation may rise.

However, after the release of weak data on NFP likelihood of interest rate rises in the US in June, it has almost disappeared, in the opinion of many market participants.
Higher interest rates usually put pressure on gold, which does not bring interest income and become less attractive compared to higher-yielding assets while increasing the cost of borrowing.

Sellers of gold were taken by surprise by weak data on the US labor market. Now, market participants will assess the future prospects in the US monetary policy.

Monday, 06 Jun, 2016 / 11:00

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