Gold prices were struggling after the comments made by the US Fed Vice Chair Richard Clarida in the previous week
Gold had somewhat of a flash crash in Asian trade this morning as price spiked under the $1,700 level amid a spate of sell orders. Gold has been weak since the Federal Open Market Committee (FOMC) decided to keep on with low rates despite inflation running hot. Since then, price has regained that level, but it remains to be seen what happens when US traders enter for the day.
Gold prices were already struggling after the hawkish comments made by the US Federal Reserve Vice Chair Richard Clarida in the previous week.
Also weighing on the yellow metal could be the latest Covid and stimulus updates.
The case for tapering and hiking rates actually got a boost on Friday following better than expected US jobs report with nearly 1 million new jobs created last month.
Although the early signals for the key jobs report were sluggish, the US Bureau of Labor Statistics renewed optimism with July month’s figures. As per the latest data, the headline Nonfarm Payrolls (NFP) jumped 943,000 compared with 938,000 prior (revised from 850,000), also crossing the market expectations of 870,000.
There is a big week ahead as price action is likely to see some heavy volatility.
The main focus this week is once again in the US ahead of another CPI reading. Though inflation is well and truly out of control in the US, that doesn’t seem to have the Fed interested in taper or raising rates.
Another high print along with last week’s jobs number is surely putting pressure on the Fed. If they –do begin to taper, that could also finally be decisive and sends the red-hot stock market lower.