Quotes of gold stabilized near two-week high, as investors cautious on the eve of today’s speech by Fed Yellen.
Experts note that comments Yellen, who will speak on the economic outlook and monetary policy, will help to clarify the regulator plans for the next meeting. Earlier Yellen stated that the base rate may be increased in the coming months if the economy will continue to grow and strengthen the labor market. However, disappointing data on the US labor market, presented on Friday, strengthened the confidence of market participants that this month the Fed will not tighten its monetary policy. Recall that in May, the number of people employed in non-agricultural sectors increased by 38 thousand., Which is the lowest increase since September 2010. There have also been revised downward the figures for April and March -. In general, the -59 thousand unemployment rate fell in May to 4.7% compared to 5.0% in April. Economists had expected employment to increase by 164 thousand., And the unemployment rate will be 4.9%.
Today futures on interest rates Fed indicate that the probability of a rate hike in June is 6%. Meanwhile, the chances increase rate estimated at 37% in July. Higher interest rates in the US have a negative impact on the price of gold, since lead to a stronger dollar, which trades precious metals. This makes the purchase of gold more expensive for holders of other currencies.
“Now on the market there is a lot of uncertainty about whether the Fed will raise rates or not, – said Commerzbank analyst Eugen Weinberg -. This is the single most important factor in the gold market right now.” A recent Reuters poll showed that the leading banks on Wall Street consensus expected that this month the Fed will leave rates unchanged.
Meanwhile, it was reported that for the week to 31 May, hedge funds and money managers cut their bullish position in gold contracts on the COMEX. Gold reserves in the largest gold ETF-fund SPDR Gold Trust rose on Friday by 0.7 percent and amounted to 881.44 tons.
The cost of the August gold futures on the COMEX rose to $ 1046.1 per ounce.
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