Gold price climbs to 3-week high as USD falls
There’s been a retracement of the recent strength of the US dollar and as a result, the price of gold has recovered. The move in the dollar came after US JOLT's job openings.
They were expected at 9.5 million, which would have been a May 2021 low, but came in at 8.827 million. This means that the labour market slowdown is accelerating after months of unprecedented monetary policy tightening by the Federal Reserve. Questions are now circling that the Fed may now have done enough.
(Video Transcript)
JOLT openings
Now, we've been witnessing a relatively hefty drop in the USD after the jolt openings yesterday, the job openings out in the States that were expected at 9.5 million, which would have been a low not seen since May 2021. In fact, they came in at 8.827 million. Now, what's this mean?
Well, it means that the labour market slowed down after accelerating months of unprecedented monetary policy tightening by the Fed. The count peaked in March 2022 at just above 12 million job openings, then gradually slowed to 11.2 million at the end of 2022. Since the slowdown, it's been pretty much constant.
The dollar
The USD taking the biggest hit yesterday. I want to show you this chart, which is the dollar basket down yesterday for the second day in a row. In fact, you can see at the moment, we are absolutely on this line of support, which was the resistance that we saw twice back at the back end of June at the beginning of July at 103.20, the country trading at 103.20. The dollar hitting that news on the jolt numbers yesterday.
And this sort of figure reduces the chance that further Fed interest rate rises. So that's why we're seeing a drop in the dollar. Now, as a result of this, we have seen moves in a lot of the major crosses. Yesterday, the euro up above this prior line that we'd be watching of the 61.8% retracement at 108.80. It's now trading down a little bit below that.
Gold price
But I think more importantly, it's been a bit of relief for the price of gold. Now, gold has risen over the last couple of weeks or so. And yesterday it traded up and stayed up above the 50 period moving average and the country trading at 19.36.
This, of course, is the gold price in dollars, which when you get the dollar move like we've had, you get the country move in the price of dollar based commodities because of the currency factor. So nonetheless, gold is up as we see there at 19.36.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
Live prices on most popular markets
- Forex
- Shares
- Indices
