International Gold (XAUUSD) News: Steep Decline as US Job Data Boosts Dollar
New York, NY – The price of gold (XAUUSD) plunged on Friday, January 6, 2023, after the release of strong US job data. The precious metal fell to its lowest level in over two months, as the US dollar strengthened against major currencies.
Key Points:
* Gold fell by over 2% to $1,820 per ounce, its lowest point since October 11, 2022.
* The decline came after the US Labor Department reported that the US economy added 223,000 jobs in December, well above expectations.
* The strong job growth boosted investor confidence in the US dollar, which rose against other currencies.
* A stronger US dollar makes gold more expensive for holders of other currencies, leading to decreased demand.
Analyst Comments:
“The strong jobs data has shifted expectations, increasing the likelihood of further interest rate hikes by the Federal Reserve,” said Michael McCarthy, chief strategist at Tiger Brokers. “This has made gold less attractive as an inflation hedge.”
“We are seeing a shift in sentiment towards gold as investors are now looking for more risky assets that will benefit from higher growth,” added Carlos Cacho, senior market analyst at IG Markets.
Outlook:
Analysts expect gold to remain under pressure in the near term as the US dollar continues to strengthen. However, they note that gold remains a safe-haven asset during times of economic uncertainty, and could regain value if geopolitical tensions escalate or if inflation remains elevated.
Technical Analysis:
The technical indicators for gold suggest a bearish outlook. The metal has broken below its 200-day moving average, a key support level. It is also trading below its Ichimoku cloud, another indicator of a downtrend.
Disclaimer:
This article is for informational purposes only and should not be considered investment advice.
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