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ECB Bond Plans Holds Gold At $1700 Per Ounce
Bullion traders have not had a great run in the past few months and gold has gone from being the investment safe house to a volatile asset. On the 6th of September, spot gold tethered over the $1700/oz mark as the European Central Bank planned a drastic recovery by implementing a bond buying program that has unlimited funds. Although this was the major factor for the rise in gold prices, the economic data of the US was also encouraging. This further bolstered the bullion market and promised bright and shiny days for bullion investors.
US Labor Market Also Shows Improvement
The United States labor market showed significant improvements and this was reflected by the jobs data that was released by it. Six-month highs that gold prices had attained were the reason behind gold holding on to the $1700/oz mark. A government report showed that the number of claims by jobless people has come down drastically when compared to the figures in early March. ADP, the payrolls processor, issued a statement that the number of jobs added by the United States private sector was the highest since March. The rise in the employment figures is an effect of the concerted effort by the government to ensure that people have the maximum opportunity to be employed.
Improvement Signs Could Limit Easing From Federal Reserve
However, these signs of economy improving might not be so good from the bullion investors’ point of view. The Federal Reserve was providing quantitative easing to the economy for helping it improve and this easing was done in different rounds. These signs might influence the people concerned to stop the third round of easing. But the quantitative easing was the reason behind 8 percent rise in gold prices from the middle of August. If the easing is stopped, it might also mean the end of Bull Run gold was witnessing in recent times. However, investors were not too worried about the quantitative easing. They were looking forward to the non-farm pay-rolls data from the US that could give them signs of how the market is going to shape up in the coming days.
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