Despite the recovery on the US markets, the gold price can defend its profits. A weaker dollar and the sharp drop in new hires in the US support the yellow metal.Gold is down significantly on Wednesday. The weaker US dollar, speculation on a rate cut in the US and the weak labor market are increasing the need for a safe haven.For a long time, investor demand for gold was comparatively weak. The price struggled with the $ 1,300 mark and it was hard to keep track of it for a long time. This could change now. SPDR Gold Shares’ gold holdings rose 2.2 percent on Monday. It was the biggest plus in almost three years.
Analysts see the possibility that gold could exceed previous year’s highs. The basis for this could be possible interest rate cuts. Fed Chairman Jerome Powell said they wanted to respond appropriately to the US trade dispute with China. For the market, this means key rate cuts, and Bank of American Merrill Lynch expects prime rates to fall for the first time in September and to be cut by 75 basis points early next year. This was accompanied by a reduction in growth forecasts for the US economy from 1.8 percent to 1.2 percent in the second half of the year.The US labor market also already shows significant weaknesses. The data company said that only 27,000 jobs were created in May, an increase of 180,000 was expected. If the official labor market data due on Friday confirm this, that would send a strong signal to central bankers.
After some key economic indicators in the US already showed weaknesses, the important ISM PMI for the services sector improved by 1.4 points to 56.9 points in May. Only a stagnation was expected.The ounce of gold is up 0.8 percent to $ 1,339.90, while silver is up 1.0 percent to $ 14.92 / ounce.