Gold price today 3/8: US economy accelerates, gold goes down
On August 3, the price of gold on the Kitco exchange dropped $16.32 to $1,935.85 per ounce. If the labor market shows signs of recovery, it will encourage the US Federal Reserve (Fed) to continue raising interest rates, which is positive for gold. Analysts predict a slight decline in payrolls for July, but they will remain at a relatively high level.
Higher interest rates and a stronger dollar are factors that may put pressure on gold prices. According to Daniel Pavillonis, a senior market strategist at RJO Futures, gold prices are currently stuck between $2,000 and $1,900.
There was increased risk aversion in the markets midweek due to the unexpected downgrade of the US government's credit rating by credit rating agency Fitch. This is the first downgrade by a major credit rating agency in over a decade. Fitch cited the expected fiscal decline of the US government in the coming years as the reason for the downgrade.
Higher interest rates and a stronger dollar are factors that may put pressure on gold prices. According to Daniel Pavillonis, a senior market strategist at RJO Futures, gold prices are currently stuck between $2,000 and $1,900.
There was increased risk aversion in the markets midweek due to the unexpected downgrade of the US government's credit rating by credit rating agency Fitch. This is the first downgrade by a major credit rating agency in over a decade. Fitch cited the expected fiscal decline of the US government in the coming years as the reason for the downgrade.
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Traders and investors were not shaken by the sudden Fitch news, but it did somewhat dampen the market's optimism that had previously pushed US stock indexes to highs. new in the year. Initial safe-haven demand for gold was dwarfed by the aforementioned bearish external markets today.
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Jim Wyckoff, senior market analyst at Kitco, wrote in a report: “Traders and investors were not shaken by the sudden Fitch news, but it did somewhat alleviate the sentiment. Previous market optimism has pushed US stock indexes to new highs for the year.”
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The outlook for the yellow metal remains hazy, especially with US interest rates set to stay higher for longer this year. While gold is expected to benefit from the Fed's final rate cut next year, it is expected to receive limited support in the near-term.
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The US ADP National Employment Report for July revealed an unexpected surge of 324,000 workers, surpassing the estimated 175,000 increase. This significant rise follows a previous increase of 497,000 in the June report. The strong data is likely to impact the gold market and influence advocates of US monetary policy, who are in favor of a rate hike by the Fed.
