Last week, the price of gold increased as the market tried to figure out the possible effect of the weak U.S. jobs report on the Fed’s monetary policy. This comes as the new coronavirus variant, dubbed omicron, continues raising uncertainty in the economy.
In New York, U.S. gold futures rose on Friday by 1% to reach $1,780 per ounce. By 12:15 p.m. ET, spot gold was up by almost 1%, reaching $1781. 60 per ounce, avoiding another weekly loss.
Earlier that day, the Bureau of Labor Statistics had reported that only 210,000 jobs were created in November, which is significantly lower than what economists expected. It was expected that in the month of November, about 530,000 jobs would be created.
Ahead of the jobs report, bullion was holding firm, with figures showing that since the release of the report, it has risen considerably.
Data from the report also shows that employment growth in the United States slowed significantly last month, with the rate of unemployment decreasing by 4.2%, hitting a new low. This suggests that the labor market was tightening at a rapid pace.
After the report’s release by the bureau, the U.S. dollar also weakened before becoming stable once more. During this short period of decline, the dollar-denominated precious metal became more expensive for holders of other currencies.
In addition to the subpar employment figures, the released report also highlighted that wages dropped below expectation in November, which indicates that inflation may have risen. Traditionally, gold is considered to be a hedge against increasing price levels.
In an interview with Reuters, Suki Copper, an analyst at Standard Chartered, stated that the initial increase in the price of gold proposed that the market considered the missed print as a sign that tapering wouldn’t be hastened. Senior market analyst at OANDA Edward Moya stated that amid uncertainty over the new coronavirus variant, gold markets were currently in “stand-by mode.”
Moya explained that it wasn’t clear whether or not more investors would buy/hold the precious metal for safety, particularly if one considered that the equity market had been moderately flexible.
In addition to this, Ole Hansen, an analyst at Saxo Bank, stated that until more news about the omicron variant and its potential was received, the market would continue trading with uncertainty, noting that this would not only affect the gold market but also some of the markets that depend on demand, such as the stock markets, metals and energy markets.
Nonetheless, precious metals sector players such as Asia Broadband Inc. (OTC: AABB) are likely to see this uncertainty as a simple blip since their long-term plans factor in such fluctuations resulting from market sentiment.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
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