Gold recovered slightly amid weak US employment data

Gold recovered slightly amid weak US employment data

A first estimate by the Bureau of Labor Statistics showed that non-farm jobs increased by 559,000 in May, double the number in April but 14% below analysts’ forecasts.

For the second day, Western stock markets struggled, while commodity markets rallied amid falling long-term bond interest rates.

The price of gold fell to $ 1.856 overnight, down 3.1% from Monday’s new 5-month high.

US employment data released Friday showed that real interest rates on 10-year inflation-protected Treasury bonds (TIPS) fell to -0.81% after rising to -0.79% on Thursday, the smallest negative reading. in almost two weeks.

negative correlation between 10-year TIPS and gold price

Gold and 10-year TIPS returns have shown a strong negative correlation of -0.87 over the past 5 years. This means that the connection between gold and real rates is almost as strong as between gold and silver.

According to British media, due to the high price of gold and investor appetite, gold mining giant Nordgold Alexei Mordashov intends to get a listing on the London Stock Exchange with a projected value of 3.5 billion pounds ($ 5.0 billion).

The Russian Sovereign Wealth Fund has said it is cutting the dollar in its portfolio by $ 185 billion, created from oil tax revenues and recorded as part of Moscow’s foreign exchange reserves. The NWF will replace dollars with euros, Chinese yuan and gold to evade US sanctions on Crimea.

Elon Musk, meanwhile, was accused of another drop in cryptocurrency prices after Tesla CEO tweeted a broken-hearted emoji next to the word bitcoin.

As Livemint reported, investors are running into gold as volatility in the cryptocurrency market rises.

However, domestic demand for gold in India, the second largest consumer of the precious metal, has collapsed amid the ongoing Covid-19 crisis. Gold imports to the largely non-mining country fell to 11.3 tonnes in May from 70 tonnes in April and a record 160 tonnes in March.

The change in China’s gold discount to the global benchmark in London suggests an oversupply of local supply, exacerbated by rumors of a “short sale” by a major trader after the global gold price topped $ 1,900 for the first time since January.

The big tech players in China’s “sharing economy” have received a “strong reminder” from Beijing pricing monitors and monopoly on a “reasonable market price order.”

The news comes after the communist dictatorship in Beijing last week tightened restrictions on cryptocurrency mining, trade and services, and took steps to set price caps and impose “anti-speculative” rules on natural resources after copper and iron ore reached new record highs.

Meanwhile, the meeting of finance ministers from the rich G7 countries is expected to agree on a minimum corporate tax rate of 15% for multinational digital companies that “have made profits unseen in any other sector of the economy.” The need to introduce a sales tax for such businesses has been called “urgent”.

Amazon (Nasdaq: AMZN) shares, which fell 1.4% on Thursday, lost more than 8.1% from a new all-time high in late April. The Facebook platform finished yesterday 2.0% below the new record high of Thursday before last.

Silver also rallied with gold on Friday, returning to $ 27.60 an ounce.

Posted by Adrian Ash June 6, 2021 | Translation: Gold Reserve

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