How The June U.S. Jobs Report Impacted Gold Prices | Nasdaq.com

The Labor Department reported job gains totaling 222,000 for the month of June, a figure which was much higher than expected. The favorable jobs report strengthened expectations of the Federal Reserve staying on course for another 25 basis point rate hike in 2017, translating into more pressure on gold prices .

Gold is largely seen as a safe-haven asset from an investment point of view, with investors favoring the yellow metal in times of macroeconomic uncertainty. However, improving economic conditions tend to drive investors towards other asset classes such as equities. Moreover, rising interest rates (which usually coincide with improving economic conditions) tend to lower the investment demand for gold as well, since securities linked to interest rates become more attractive vis-a-vis gold, which does not offer any coupon/interest component in terms of returns. Steady gains in economic and jobs growth are expected to keep prices subdued in the near term, as illustrated by our forecast shown below.

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