On Monday February 6, gold prices inched higher as the price of the U. S. dollar weakened following a disappointing U.S. job report that crushed hopes of a rate hike by the Federal Reserve.
Gold Rises Again
By Monday, spot gold prices have gained 0.3 percent in value, amounting to about $1,222.95 per ounce. Value of gold has been inching up and up for three consecutive days. By the end of Monday the 6th, the gold futures in the U.S. were up by 0.4 percent. The average price of gold at the end of was 1,200 dollars.
Gold prices did not look promising as December neared last year. However, as the end of January neared, prices have begun to slowly rise upward. The gold is gaining on the dollar. Though the gains are small, they are definitely worth noticing.
Experts attribute Monday’s price hike to an unexpected U.S. job growth report. The report was supposed to show signs of strong job recovery for the post-recession economy. The 2008 global recession put unemployment levels to record highs in the U.S., which were then brought down to acceptable levels under the Obama administration. Job recovery was largely expected to go on smoothly regardless of the changing political climate.
However, the job report showed a picture bleaker than expected. While reports showed that service sector industries like restaurants and construction sites hiring more new people, the wages had barely risen.
The Dollar is Weakening Showing a Rosy Future for Gold
Wall Street was expecting at least two interest rate hikes by the Federal Reserve this year. The feds are not making any rate hikes following the U.S. jobs report. Any weakness in this regard, on the other hand, is very good news for gold. The overall value of gold is highly sensitive to the value of the dollar. Even a slight change to the dollar can have a profound impact on the price of gold.
Last month, the Dollar Index was down only by 0.1 percent. Despite the fraction of a change to value, gold prices pushed up on all fronts across the price charts. Solid gold per ounce now is bought at $1,230 per ounce.
Wall Street was initially anticipating a rate hike in March initiated by a Clinton administration. Now that scenario is becoming more and more unlikely under the President Donald Trump. Investors expect that gold should do well at least for the first half of the year.
Geopolitics May Affect Gold Prices Even More
Even if the situation in the U.S. stabilizes, geopolitical issues may keep gold prices high for a significant amount of time, some analysts say. Brexit might make gold valuable for at least the coming two years in Europe. The situation in Iran and Ukraine will likely keep gold prices high in February, especially as these situations coincide with the weakening of the dollar.
Precious metal overall are enjoying good prices these months. Both silver and palladium spot prices were up In January along with gold. Overall, it’s a good time to be investing in gold according to financial experts.