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.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.