Gold futures closed lower at the last trading session. Gold futures prices closed at $1,934.30, recording losses of 0.2%.
The price decline in the safe-haven asset was triggered by an impressive US jobs report seen as “a positive sign for the world’s largest economy” and the unemployment rate, still dropping to 8.4%, shows the U.S economy is on the right track to economic recovery.
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Gold sellers also kept high pressure on the precious metal as recent data, also revealed the U.S dollar rebounded in value, thereby adding more woes on prices for dollar-denominated bullion assets.
However, the fiscal delay by US congress toward another stimulus deal provided the needed support for Gold prices to remain above the $1,935 price levels, in the near term.
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What you must know about gold: The precious metal tends to usually rise in value on expectations of lower U.S interest rates, which reduces the opportunity cost of holding non-yielding bullion. Also, the yellow metal usually plunges when the U.S dollar shows signs of strength relatively.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke on the dollar strength and how it affected the price of the precious metal. He said;
“Gold fell again on US dollar strength and some liquidation to cover losses as equities fell. Other longer-term holders could be rotating out to buy the tech dip but pare losses into the close.
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“Much of the reason for lower gold lay in a stronger USD.
“Longer-term support remains from the inflation targeting, but we need inflation to pick up, and as you can see by the sell-off in commodities, that is not happening right now. So that remains a longer-term view.”
Geopolitical concerns will continue to support the longer-term need for gold, but possibly not at these price levels.
