Gold has had a stunning 7 sessions run, which started last Friday June 3rd when Non-Farm Payroll data came out much lower than expected. The shiny metal has gained 5.84% in this period alone, reaching levels just short of $1300. Most of the momentum has come from incorrectly estimated jobs data for May. The forecast had been for 170k jobs and only 39k was reported. Gold jumped, and went from an open of $1210.68 to the ounce to close at $1244.44 for the day.
The particularly low jobs data meant that the likelihood of an interest rate hike in the US suddenly became extremely slim. There had been calls for an interest rate hike as early as the next Federal Reserve Open Market Committee (FOMC) meeting to be held over today and tomorrow. The decision on monetary policy will be announced Wednesday at 7:00 pm.
Most analysts’ expectations are for the Federal Reserve to hold interest rates steady. This view is despite the fact that the Yellen has recently stated that they see the economy strong enough to support higher interest rates, and that last month’s job data was an anomaly. It would therefore seem that the central bank will wait at least one more month to see if jobs data does return to more consistent levels.
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