Gold price sees another 5% rally this week as geopolitical uncertainty drives the market to touch $2350
he gold market continues its unstoppable run to record highs as it touches an all-time high of $2,350 an ounce ahead of the weekend.
Gold’s latest rally comes after the U.S. economy created 303,000 jobs in March, significantly beating expectations. At the same time, unemployment dropped to 3.8%. Despite the robust job growth, wages were relatively muted, rising 0.3%, in line with expectations.
Economists described the latest nonfarm payrolls data as a “blockbuster report,” which supports higher bond yields and relative strength of the U.S. dollar. Bond yields have risen as the market continues to shift their expectations regarding the start of the Federal Reserve’s easing cycle.
This past week, members of the Federal Open Market Committee have been fairly evasive on the topic of interest rate cuts. According to the CME FedWatch Tool, markets see a 54% chance of a rate cut in June. Last week, markets were pricing in a more than 60% chance of easing.
Analysts note this should be a hostile environment for gold; however, June gold futures last traded at $2,345.50 an ounce, up 1.60% on the day. The precious metal is up nearly 5% from last Friday.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, said that he suspects gold is attracting some safe-haven flows as geopolitical tensions in the Middle East heat up because of Israel’s war with Hamas in Gaza.
This week, Commander of Iran's Revolutionary Guard, Gen. Hossein Salami, vowed retaliation after an airstrike on an Iranian diplomatic compound in Syria killed seven members of the military group, including two generals.
In a social media post, Marin Katusa, founder of Katusa Research, gold’s safe-haven bid.
David – http://markethive.com/david-ogden