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.
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.
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.
“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.