“The gold price … is continuing the recovery it began yesterday after dipping below $1,830,”Commerzbank analyst Carsten Fritsch
By Anna Golubova
The gold market extended its rally on Thursday as prices saw double-digit gains on a weaker U.S. dollar index and recession fears.
Gold moved sharply higher, with August gold last trading at $1,873.30, up $24.60 on the day. Earlier this week, gold was down near the $1,830 an ounce level. In the meantime, the U.S. dollar index fell 0.61% to 101.87 on Thursday.
“The gold price … is continuing the recovery it began yesterday after dipping below $1,830,” Commerzbank analyst Carsten Fritsch. “The upswing is all the more remarkable given that the gold ETFs tracked by Bloomberg also registered outflows of 2.7 tons yesterday.”
Gold investors were focused on the ADP employment data on Thursday that showed U.S. private payrolls rising by just 128,000 in May, which was the lowest gain since the pandemic recovery began.
This data is always high on investors’ radars because it gives a glimpse into Friday’s nonfarm payrolls data. Any weakness in the numbers could help bring down the Federal Reserve’s hawkish stance and help gold prices move higher, according to analysts.
“The Fed Fund Futures currently imply U.S. Fed rate increases of 50 basis points each at its next two meetings and a key rate of 2.8% by year’s end,” Fritsch added.