• Gold continues its downward trend and its lowest since late June.
  • Market sentiment shrank amid the slowdown in U.S. stimulus.
  • US employment data is optimistic, US Treasury yields are stronger and managed to push the dollar index.
  • Gold forecast for this week is at $1,750 due to the strengthening of the US dollar due to high impact NFP data.
Gold continues to experience a sharp decline, when the daily analysis of gold on August 9, 2021 written by the GIC team, gold prices slumped sharply towards midnight to early morning, and were at the level of $1,738 on Monday morning. This price reached the lowest price in the last five-month period at the moment of the US dollar recovery. Meanwhile, the greenback continued to strengthen following an optimistic US employment report rising to 943 thousand at the time of the NFP release, beating market expectations of only 870 thousand. On the other hand, US Treasury yields jumped to 1.30% on expectations of a rate hike after stronger employment data. Higher US Treasury yields are inversely proportional to non-yielding assets. Precious metals are under pressure due to the higher value of the US dollar and promising bond yields. Gold prices are "already struggling" after hawkish comments made by US Fed Vice Chair Richard Clarida in the previous week. The precious metal fell sharply since Friday to its lowest following U.S. employment data. Despite early signals for a sluggish major jobs report, the U.S. Bureau of Labor Statistics renewed optimism with July figures. The Unemployment Rate fell to 5.4% from 5.9% in June and the Labor Force Participation Rate increased slightly to 61.7%. With stronger employment data, this underpinned hopes of a US economic recovery and sent the US dollar index up. However, US policymakers are at odds over US President Joe Biden's proposed trillion stimulus plan, although initially agreeing to the plan, Democrats and Republicans have not reached an agreement. Meanwhile, the Delta variant continues to pose a serious threat to market sentiment in many countries, and this is likely to support the safe-haven demand of the US dollar. Daily transmission cases in the US reached the highest level for the past six months, namely 95,000 in these seven days. The same concern is also felt by China, which has experienced a sharp increase in Delta variant cases. Gold traders are expected to keep an eye on risk factors while waiting for China's key inflation data. If China's inflation numbers fall more than expected, this could add more strength to the US dollar index and could negatively impact gold prices. That's the analysis of the gold daily on August 9, 2021, GIC provides articles and other analyses in the GIC Journal such as explanations of fluctuations, and you can also read information about GIC in the GIC Press Release.