Gold starts a new week trading at around $1,775 an ounce as investors assess the likely trajectory of the Federal Reserve’s interest rate hikes in the wake of the positive jobs data released at the end of last week.
The figures showed the US had added double the number of jobs that was anticipated, giving the Fed greater scope to increase its series of interest rate hikes as it tries to curb inflation without risking tipping the economy into recession.
While gold did drop a little on Friday in the wake of this news, it has largely held on to the gains it has made since late July, illustrating that support for the precious metal is strengthening.
As such with gold’s upside gains capped by the potential of more aggressive rate hikes by the Fed and other central banks across the world, there now appears to be sufficient support to prevent the price falling to the $1,700 an ounce level seen in July. How strong that support proves to be will be tested when the Fed’s next interest rate decision is announced at the end of this month.
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