Gold Price Hits 5-Week High on Weak U.S. Data
Posted by Brian Ford on April 09, 2015
The gold spot price jumped by as much as $20.90 on Monday and, as of 3pm EST, is hovering near a five-week high of $1,222.40 per ounce. The gold spot price is up 4.53% in the last 30 days. Certified Gold Exchange analysts have attributed the substantial increase of the gold price to a combination of disappointing U.S. economic data, technical buying and a lower U.S. Dollar Index (USDI).
The Department of Labor (DOL) reported last Thursday that only 126,000 jobs were added in March. This is in stark contrast to that department’s prior projections of 248,000 new jobs. Despite the Federal Reserve’s efforts to stimulate the U.S. job market by keeping interest rates low, new jobs have been minimal and many “created jobs” claimed by the current administration have been minimum wage and/or part-time positions.
The Federal Reserve’s insistence on holding interest rates below 1% has resulted in a drawback of the dollar’s value, thus boosting the price of gold and other commodities that are priced in dollars. In just the last month, the dollar has retreated 3.6%. This is counterproductive to the Fed’s strategy of keeping interest rates low with the goal of stimulating the U.S. economy and encouraging investment in the greenback.
CGE analysts expect more fluctuation in the gold price this week due to a flurry of data set to be released, including the employment trends index, the monthly manufacturing report and the purchasing index. Subscribe to the Certified Gold Exchange mailing list below for regular gold market updates, or call (800) 300-0715 today to buy and sell gold directly with “America’s Trusted Source For Gold.”