Gold hit by jobs report

Gold is in the red today as a strong jobs report from the US last week has strengthened the US dollar.

Gold bars
Source: Bloomberg

Gold is trading at $1312, down 0.4% on the day, after a better-than-expected non-farm payrolls figure increased speculation that the Federal Reserve will increase rates sooner than anticipated.

The US has added over 200,000 jobs to its payrolls for five consecutive months, and now some traders are expecting a rate rise for mid-2015 which would hurt non-interest bearing assets like gold.

On Wednesday, the Fed will release the minutes from its latest meeting. Even though the US economy is improving I foresee dovish tones from the Fed in the short-term which could boost the metal.

Gold is receiving support at the 100-day moving average of $1306. A commitment to low interest rates from the Fed on Wednesday could put gold on the path to $1330.

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