For 4 Days In A Row, Gold Strengthens Triggered By The Weakening Of The US Dollar

Illustration of gold mining products. (Pixabay)

JAKARTA - Gold prices rose at the end of trading Thursday, June 1 or Friday, June 2 morning Indonesian time.

This condition has been going on for the fourth day in a row and is preparing to record its best weekly since last March.

The strengthening of this gold was due to the fall in the United States (US) dollar following the weakening of US employment and manufacturing data indicating a gap in interest rate hikes at a Fed meeting this month.

According to Antara's report, the most active gold contract for August delivery in the Comex New York Exchange division, jumped 13.40 US dollars, or 0.68 percent, to close at 1,995.50 US dollars per ounce, after touching the highest level of the session at 2,000.70 US dollars and the lowest at 1,970.10 US dollars.

Gold futures rose 5 US dollars or 0.25 percent to 1,982.10 US dollars on Wednesday 31 May, after lifting 14.00 US dollars or 0.71 percent to 1,977.10 US dollars on Tuesday 30 May, and boosted 60 cents or 0.03 percent to 1,944.30 US dollars on Friday 26 May.

The Comex Exchange closed on Monday 29 May for the Memorial Day holiday. For this week, gold saw a 2.6 percent return, the largest from Sunday to March 10.

The dollar index, which measures the greenback against six major rival currencies, has seen its biggest one-day decline since March 10, slipping 0.7 percent, to a session low of 103.435. The decline comes after industry reports showed layoffs in the US tech, retail and automotive sectors surged last month as overall recruitment was at its lowest level since 2016.

The dollar also fell as Patrick Timothy Harker, one of Fed's policymakers and president of the Federal Reserve for the Philadelphia region, said on Thursday June 1 that the central bank "should at least miss the rate hike in June."

The market is waiting for a monthly work report to be released Friday, which will lay the groundwork for the gold price action.

Economic data released Thursday, June 1, varies. The US Department of Manpower reported that the US's initial claims for the country's unemployment allowance rose 2,000 to 232,000 which were adjusted seasonally for the week ending May 27.

The US Manufacturing Manufacturing Manager Index (PMI) of the seasonally adjusted S&P Global posted 48.4 in May, down from 50.2 in April, but in general, in line with previously released 'flash' estimates of 48.5.

The Automated Data Processing Inc (ADP) said in its National Manpower Report that the work of the private sector grew by 278,000 in May, well ahead of market forecasts of 170,000.

The US Department of Manpower reported that the productivity of the US non-farming business sector fell 2.1 percent in the first quarter of this year, a smaller decline than the previous reported decline of 2.7 percent.

The US Department of Commerce reported that US spending on construction projects rose 1.2 percent in April to $1.91 trillion. The market expects construction spending to rise 0.1 percent in April.

"Gold prices enjoy some weak US data that lowers the Fed's interest rate hike opportunities," said Ed Moya, analyst on online trading platform OANDA. "If the US work report isn't impressive, it could be a catalyst that brings gold back to the top of the US$2,000 level."

Another precious metal, silver for July delivery rose 40 cents, or 1.70 percent, to close at 23,987 dollars an ounce. Platinum for July delivery rose 11.10 dollars, or 1.11 percent, to settle at 1,010.10 dollars an ounce.