Positive sentiment continues in gold
Gold prices continued to rise ahead of key employment data that could provide investors with clues about the Fed’s interest rate path this year.
Gold turned upward ahead of Friday’s non-farm payrolls report.
Spot gold is trading at $2,367 per ounce on the fourth trading day of the week.
As the labor market data in the USA point to a slowdown, it is becoming clear that the Fed will start reducing interest rates this year, while the employment report data to be announced in the USA tomorrow is also expected to give clues about the Fed’s road map.
While the ADP private sector employment announced in the country yesterday remained below market expectations, with an increase of 152 thousand people in May, the annual wage in May increased by 5 percent, as in April.
The Purchasing Managers Index (PMI) of the service sector of the Institute of Supply Management (ISM) in the USA increased by 4.4 points on a monthly basis to 53.8 in May, exceeding market expectations. S&P Global’s service sector PMI data for May increased by 3.5 points compared to the previous month, reaching 54.8.
Fed officials are looking for more evidence that inflation is moving toward the central bank’s 2 percent target as they consider when to cut interest rates. Gold, which reached a record level last month, is traded in a very narrow range due to uncertainty about the course of interest. Markets are cautiously increasing the chances of a rate cut.