Gold Prices Fall as US Employment Data Surges, Will it Break Support at $1,934?

Investing.com – Gold prices fell significantly during these trading moments, on Monday, in conjunction with a rally that benefited from the recent strong employment data.

Data from the Bureau of Labor Statistics showed that the US economy added 339,000 jobs in May, and this represents the fourteenth consecutive month in which jobs were higher than estimates, as expectations indicated that only 190,000 jobs were added during the month.

And the dollar now

It fell by 0.53% to $1,959 an ounce.

While spot contracts fell by 0.26% to 1943 dollars an ounce.

On the other hand, the dollar index rose by 0.2% to 104.157 points.

gold when settling last week

Gold prices settled lower on Friday, as investors evaluated interest rate expectations after the release of mixed employment data.

Upon settlement, gold futures fell by 1.3%, or the equivalent of $25.9, to reach $1969.6 an ounce, shrinking the gains for the week at 0.3%.

What drives prices?

Gold prices fell by more than 1% on Friday, after data from the Bureau of Labor Statistics showed that the US economy added 339,000 jobs during May. the month. But the unemployment rate rose to a seven-month high of 3.7% from a 53-year low of 3.4% in April.

The higher unemployment reading prompted markets to expect at 79.3% the Fed to leave interest rates unchanged at its June 13-14 meeting, according to CME FedWatch.

“Money markets continue to favor peg rates, so the downside for gold may remain limited even if it loses some safe haven inflows from debt ceiling concerns,” said Matt Simpson, senior market analyst at City Index.

Simpson added: “The most important question now is whether gold will break the support at $1934 and then fall towards $1900.”

Non-interest-bearing bullion tends to become less attractive in a higher interest rate environment.

Last week, the US House of Representatives passed a bill to suspend the $31.4 trillion debt ceiling, which keeps America from defaulting for the first time ever.

Demand for the yellow metal fell as a safe haven, after the Senate passed bipartisan legislation supported by President Joe Biden to raise the debt ceiling, which stimulated risk-taking among investors.