Gold Prices Continue to Fall
Gold prices hit a three-week low as they continue to fall due to U.S. data projecting a strong rebound in U.S. economic growth in the second-quarter.
Data from the Atlanta Federal Reserve tracker of gross domestic product (GDP) has helped see gold fall to $1,257 an ounce. The organization’s release projects 4.3% growth in the second quarter, showing a healthy and growing American economy. (Source: “Gold prices mark 3-week low,” MarketWatch, May 1, 2017.)
In April, bullion was edging near the $1,300 mark. But, with the cooling of political tensions across the world from their most volatile states in late-March and into April—alongside strong forecasts for the U.S. economy—gold has fallen into a slump.
When the U.S. economy is growing, the U.S. Federal Reserve often undertakes hawkish monetary policy positions, increasing the value of the dollar and, therefore, weakening the appeal of gold, due to it being a non-interest-yielding asset.
The Fed will make an announcement on Wednesday that could portend a shift in monetary policy.
The April labor market report—another important indicator of the health of the American economy—will be released this Friday. It will also likely have an effect on gold, depending on how the numbers shake out. For now, economists are forecasting that 190,000 jobs were created in April, with unemployment remaining unchanged at 4.5%.
In the politics arena, next week will officially see the conclusion of the French elections, with the current front-runner— Emmanuel Macron—leading in the polls, slated to defeat the far-right Marine Le Pen, which will put an end to some concerns in Europe, and therefore reduce interest in gold once more.
Gold prices are likely to experience several strong shifts in the coming week, since the events mentioned above will have an influential effect on the value of the commodity.