Gold futures hit $2,000, poised for best week since March

The price of gold futures surged above $2,000 an ounce on Thursday for the first time in two weeks and settled close to that level as the dollar fell as a result of weaker-than-expected employment and manufacturing data from the United States, which pointed to a pause in rate hikes in the coming two weeks.

On the New York Comex, the front-month gold contract finished at $1,995.50 per ounce, up $13.40 or 0.7% daily. Prior to that, the benchmark gold futures reached a two-week high of $2,065. The expected return on gold for the week is 2.6%, the highest since March 10.

By 14:53 ET (18:53 GMT), the spot price of gold, which reflects actual bullion trades and is sometimes more carefully watched by dealers than futures, was at $1,976.39, up $13.72 or 0.7% for the day. Earlier in the session, spot gold reached a high of $1,983.17.

The Dollar Index, which compares the dollar’s value to those of six other major currencies, experienced its worst one-day decline since March 10 and hit a session low of 103.435. The decrease occurred after a study from the industry revealed that hiring overall had dropped to its lowest level since 2016, while layoffs in the American tech, retail, and auto sectors spiked last month.

The data provided by employment monitor Challenger, Grey & Christmas, Inc. provided an alternative perspective to the idea that the labour market was still excessively robust and consistently fueling inflation. When the Federal Reserve’s policymakers convene on June 14, it might persuade them to refrain from hiking rates for the eleventh time in 16 months.

The dollar also declined due to remarks made on Thursday by Patrick Timothy Harker, one of the Fed’s policymakers and its president for the Philadelphia area, stating that the institution “should at least skip raising rates in June.”

The non-farm payrolls report for May is the focus of everyone’s attention right now, at least in the gold market. The Fed has identified one of the main causes of some of the worst U.S. inflation in 40 years as excessive job and wage growth since the worst of the COVID-19 breakout three years ago.

Economists are projecting a growth of 180,000 for May’s non-farm payrolls report, versus April’s 253,000. Any figure below 200,0000 reported by the Labor Department would be viewed as dollar-negative and gold-positive.

According to Ed Moya, analyst at online trading platform OANDA, “gold prices are benefiting from some soft U.S. data that is bringing down those Fed rate hike odds.” If the U.S. jobs report is disappointing, that might be the trigger that pushes gold back above $2,000 again.

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