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🇹🇼 Taiwan /Economy & Trade

Gold Prices Rebound After Hitting Record Lows

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News From a news agency Context piece
  • Gold prices rebounded on Wednesday after hitting a multi-month low, driven by weaker-than-expected U.S. employment data and easing inflation concerns.
  • Gold experienced a significant decline in June and the second quarter, marking its largest quarterly drop since 2013.
  • Analysts suggest gold may have found a short-term bottom unless upcoming U.S. non-farm payroll data is exceptionally strong.

Gold prices saw a notable rebound on Wednesday, recovering from a recent slump that saw them hit their lowest level since November. The precious metal gained 1.6% to trade at $4071.04 per ounce, with August gold futures also rising 1.1% to $4082.40 per ounce. This recovery was largely fueled by a combination of positive economic indicators and dovish signals from the U.S. Federal Reserve.

The catalyst for the rebound appeared to be the latest U.S. employment data. The ADP National Employment Report revealed that private sector employment increased by only 98,000 jobs in June, falling short of economists' expectations of 118,000 and below May's revised figure of 122,000. This softer labor market data suggests potential cooling in the U.S. economy.

Gold delivered a nice rebound today, ADP employment data below market expectations laid the groundwork for gold's rebound, while Fed Chair Powell's comments about inflation falling prompted U.S. Treasury yields to fall and helped the dormant gold market climb significantly.

— Tai WongExplaining the factors behind gold's price rebound.

Adding to the positive sentiment for gold, Federal Reserve Chair Jerome Powell hinted that the risks of accelerating inflation have eased. This commentary contributed to a decline in U.S. Treasury yields, making non-yielding assets like gold more attractive to investors. Independent metals trader Tai Wong noted that the weaker ADP data laid the groundwork for gold's recovery, while Powell's remarks further boosted the market.

Despite the recent rebound, gold endured a difficult June, falling 11.2%, and the second quarter saw a 14.3% decline. This marks the first quarterly loss for gold in 2024 and the most significant single-quarter drop since the second quarter of 2013. Wong suggested that gold might have established a short-term support level unless the upcoming non-farm payroll report, due Thursday, shows unexpectedly robust growth.

Unless tomorrow's non-farm payroll report is exceptionally strong, gold may have at least put in a short-term bottom support.

— Tai WongProviding a short-term outlook for gold prices.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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