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XAU/USD: US dollar strengthened on the foreign exchange market _08.08.2016

Technical analysis and trading recommendations-

Published on Friday positive data on the labor market increases the probability of increasing the key interest rate the Federal Reserve in September. December gold futures on the COMEX closed down 1.7% to 1345.00 dollars per troy ounce, which is the strongest intraday decline since May 24. Price-spot up on Friday fell by $ 24 per ounce, and on Monday, the price continues to fall.

The number of jobs outside agriculture in the USA in July increased by 255 000 (180 vs. 000). The unemployment rate remained unchanged (4.9% vs. 4.8% and 4.9% in June). the WSJ dollar index, estimating US dollar exchange rate against the currencies of 16 other countries increased by 0.3%. The employment data in the US have weakened demand for safe-haven assets, including gold.

Higher interest rates put downward pressure on gold, which does not bring interest income and therefore becomes less popular with increasing borrowing costs for its purchase and storage.

Nevertheless, the possibility of tightening Fed policy markets estimated in September only 15% (9% NFP was to publication). After the release of weak data on the US GDP of NFP report will not be enough for a rate hike in September.

The Fed is also unlikely to raise rates until the first debate between presidential candidates Hillary Clinton and Donald Trump, scheduled for September 26. Most likely increase in US interest rates in December by 0.25%.

Risks with respect to the global economy, as well as lower interest rates in a number of the world's central banks with the prospect of further easing of monetary policy will support the gold price. During this period of the year the price of gold has risen by about 28% and the relevance of long positions for gold still remains.

Monday, 08 Aug, 2016 / 12:23

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