Market Analysis

What motivates the price of gold?

Gold rose in Monday morning trading in Asia, supported by a weak dollar. The latest US jobs report also allayed investor fears of an earlier-than-expected rate hike.
Gold futures were also up 0.24% at $1,787.55 by 10:39 PM ET (2:39 AM GMT). The dollar, which usually moves in reverse with gold, fell on Monday.
On the demand side, central banks including Serbia, Thailand and Ghana are increasing their gold holdings due to signs of accelerating inflation. The National Bank of Serbia told Bloomberg: “In the long run, gold is the most important guarantor of protection against inflationary and other forms of financial risk.”
According to the US jobs report, released on Friday, non-farm payrolls increased by 850,000 in June thanks to higher wages and more stimulus. It was higher than the 700,000 in forecasts prepared by While investors are now focusing on more economic data due later in the week for clues on the next move of the US Federal Reserve in its monetary policy. They are also awaiting the Reserve Bank of Australia’s policy decision, due on Tuesday, and the Fed’s meeting minutes from its last meeting scheduled a day later.
In Asia, the Japanese Services PMI for June came in higher than the expected 48. Meanwhile, data released earlier today said the China’s Caixin Services PMI in June was 50.3, lower than the May figure of 55.1 .
Gold in India also sold at a higher premium in the previous week, the first time it had done so in more than two months. Demand increased after the second largest consumer of gold eased slightly from COVID-19 restrictions.
In terms of other precious metals, silver fell 0.2%, platinum fell 0.3%, while palladium rose 0.3%.

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