Gold trading steady overnight, despite the President’s threat of raising tariffs on China. After reading the President’s tweet, equity investors started selling immediately off the headline, not waiting for the details.
Surprisingly, with the Dow futures off over 500 points, the price of Gold has only managed a slight gain. The reason being, is that with all this chaos, the Dollar Index overnight has been trading in a tight trading range of just 20 basis points.
The U.S. Dollar firmed up a bit after weaker Eurozone PPI news was released. The Pound Sterling continues to decline after pessimistic comments on Brexit negotiations from Labour Party’s Corbyn, giving strength to the Dollar.
Gold also faced pressure from a move up in the U.S. 10-year bond yield going from 2.454% to 2.565% along with firmer global equities.
Friday’s U.S. Nonfarm Payroll Report was a blowout, with 263,000 new jobs created against an expected 90,000. Revisions to the last two month’s reports were up a net 16k, and the Unemployment rate dipped to 3.6% – a 50-year low.
Gold initially sank to $1268.70 after the report, but held its support level at $1,265. That’s good news for the long holders of the yellow metal and as the day went on the price of Gold recovered nicely.
The spot price of Gold trading around the $1,280 level this morning, well above the support level of $1,264, giving investors’ confidence that in the short term the price of Gold has seen its lows.
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