Price of Gold Returns to the Highest For Three Consecutive Trading Sessions
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The price of gold per ounce reaches the resistance level of $1,795 as it returns to its highest degree for three consecutive trading sessions. This follows the depreciation of the US dollar and a decline in the long-term returns realized on US bonds.
What additionally caused an increase in the demand and price of the gold are concerns regarding new covid-19 variants and travel restrictions. While countries around the world have introduced vaccine roll-out programs the threat and vulnerability around the pandemic still looms.
Statistics from the US Department of Labor showed an increase in non-farm payroll more than what was expected. As investors reacted to this, the first week of July saw the prices of gold per ounce steady around $1,785.
A decrease of 1.43% was witnessed with respect to the 10-year US treasury yield. Treasury bond yield refers to the interest rate paid to investors by Treasury bonds. Additionally, the US dollar index, or in short known as USDX reduced to 92.25. Silver futures and copper futures settled at $26.501 per ounce and $4.2760 per pound, respectively, during the same performance of gold.
According to the report compiled by the US Department of Labour in June, there was a constant acceleration in the pace of job growth. As per the contents of the report, there’s an increase of 850,000 in the non-farm payrolls which had risen from 583,000 in May.
Moreover, the unemployment rate which was predicted to fall to 5.7% increase in June by 5.9% from May’s 5.8%.
In a report formulated by the Commerce Department of the US, it was shown that the US was experiencing a trade deficit. In fact, the trade deficit widened in accordance with approximations in May. More imports, as opposed to less exports, resulted in a trade deficit to increase to $71.2 billion in May from April’s $69.1 billion.
The widest trade deficit was recorded as the values of imports escalated 1.3% in May to $277.3 billion from April’s $273.8 billion. The significant rise in imports of industrial supplies balanced the noticeable decrease in capital imports like computers. The report also stated that the value of exports increased by 0.6% which translated to $206 billion in the figure. The value of exports in May was a shift from that of April which was $204.7. A substantial increase in exports of Pharmaceuticals was partially canceled out by a drop in passenger cars and civil aircraft exports.
The trade deficit will probably persist as far as the US’s fiscal-supported and consumer-driven recovery leads the global economic recovery.
As far as the price of gold is concerned, it did not exist from the last descending channel. It won’t happen until the gold prices moves towards resistance levels of $1815 and $1832. There are determinants that help gold to attain strong gains and the changes may be more if gains of the US dollar halt.
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