Arab Today, arab today gold slides as investors seek refuge in dollar
Last Updated : GMT 18:33:13
Arab Today, arab today
Arab Today, arab today

Gold slides as investors seek refuge in dollar

Arab Today, arab today

Arab Today, arab today Gold slides as investors seek refuge in dollar

New York - Arabstoday

Gold fell 1.5 per cent yesterday as a disappointing US jobs report spurred deflation fears, prompting investors to seek refuge in the perceived safety of the dollar and sell gold along with commodities and equities. Bullion dropped more than 1 per cent for the week, as prices slid yesterday after data showed US non-farm payrolls grew at a less-than-expected pace in June. A $3 drop in crude oil and a sell-off on Wall Street stirred fears of a global economic slowdown which have recently heavily pressured gold prices. “Gold’s decline today has to do with the notion that even though the job report is very weak, the lack of conviction that there will be another economic stimulus has caused a lot of shorter-term gold investors to sell,” Jeffrey Sica, chief investment officer of Sica Wealth Management with over $1 billion (Dh3.67 billion) in assets, said. Even though economists said the report would push the US Federal Reserve closer to additional monetary easing, which should help gold, a sharp sell-off in riskier assets across the board more than offset any hopes of Fed action for now, traders said. Spot gold was down 1.6 per cent at $1,579 an ounce by 3.04pm. US gold futures for August delivery settled down $30.50 at $1,578.90 an ounce. Silver fell 2.5 per cent to $26.97 an ounce. Fear of Europe contagion Bullion briefly turned higher after the report showed job creation during the month was not enough to bring down the US unemployment rate at 8.2 per cent, as it fuelled concerns that Europe’s debt crisis was shifting the US economy into low gear. “Certainly it brings up the picture of additional easing discussion if the job number remains weakened, and that alone is enough to buoy gold,” James Steel, chief metals analyst at HSBC, said. The payroll report has raised the chances in favour of the Federal Reserve launching a new round of monetary stimulus to boost growth, a Reuters poll of 15 Wall Street economists showed a 65 per cent chance the Fed will for the third time expand its balance sheet via large-scale bond purchases. Gold has been particularly sensitive to central banks’ monetary policies. In February, it was up 15 per cent for the year after the Fed said it would keep interest rates near zero until late 2014. Yesterday, bullion was only up less than 2 per cent. There was little support for gold from the physical market, where bullion demand remained subdued after prices rose above $1,600 earlier last week, with dealers in Asia said to be waiting for a lower price level. From gulfnews

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