Gold Prices Soar Above $4,400 as US Employment Data Reduces Fed Rate Expectations
Gold prices surged to over $4,400 an ounce for a third consecutive session on August 10, as weaker US employment data reduced expectations for tighter Federal Reserve policy and investors positioned ahead of the July CPI and PPI reports.
The latest gold rally accelerated after US employment data showed an unexpected contraction in payrolls, reducing market expectations for another Federal Reserve rate increase in September. Weaker labor-market conditions can reduce the likelihood of additional monetary tightening because they indicate less pressure for the Fed to raise borrowing costs to restrain demand.
BCA Research chief strategist Noah Weisberger attributed the rise in gold and gold-mining shares to 'investor concerns about the future path of inflation and the difficulty of containing price pressures.'