The gold price has seen quite a few ups and downs over the course of July. The price of the precious metal fell early in July to a low of £941.55 on the 14th before rising steadily again throughout the rest of the month.
The price drop followed the publication of US jobs data, which was stronger than expected and therefore increased the likelihood of further US interest rate hikes.
“We have a stellar US jobs number,” Naeem Aslam, Chief Market Analyst at Think Markets, told Reuters. “The data has brought negative news for gold traders as there isn’t really anything in this number which is going to put the brakes on an interest rate hike.”
The gold price was soon on the up again, however, as the chances of an impending rise in US interest rates dropped. Prices continued to rise again steadily for most of the month, peaking at around £968 on the 31st.
“What we’re seeing right now is the overhang from political risks in the United States,” Stephen Innes, head of trading for Asia Pacific at OANDA in Singapore, told the news agency.
The US government’s failed attempts to throw out Obamacare along with several federal and congressional investigations into US President Donald Trump’s ties to Russia relating to his campaign have called into question his first six months in office.
As political and economic uncertainty remains in the US, the dollar continues to suffer and the outlook for gold bullion looks good.
MKS PAMP trader Sam Laughlin said in a note to Reuters: “The dollar weakness should continue to support gold around current levels.”
The weaker the dollar, the more attractive US dollar-denominated gold becomes for buyers using other currencies.
Other industry news
In other industry news, The London Metal Exchange (LME) launched new exchange-traded and centrally cleared precious metals products in July, with the intention of providing a more modern and transparent solutions to strengthen the market.
Developed by the LME, the World Gold Council and six leading industry participants, it comprises spot, daily and monthly future contracts for silver and gold. Volumes were reported to surge in the first week of trading, with a total of 25,590 lots (79.6 tonnes) of gold traded.
