Gold Futures Gain For Second Week On Dollar, US Growth

As the unemployment rate falls, it is believed that wages will begin to rise, as employers are forced to offer higher pay in order to attract and retain staff. This would add weight to the arguments of those FOMC members keen to raise interest rates, in order to cool the economy, and keep inflation in check.

Gross domestic product in America rose at a 1.2% annualized rate last quarter, a government report showed.

Gold for December delivery, the most actively traded contract, settled at $1,357.50 a troy ounce on Friday.

Nonetheless, Dudley would not rule out the possibility of a rate hike prior to New Year’s Eve-although he left more than a little wiggle room to avoid a firm commitment to its possibility. The currency’s spot rates at home and overseas diverged, with the exchange rate in Shanghai rising 0.09 percent to 6.6341 a dollar of 9.43 a.m. and that in Hong Kong dropping 0.1 percent to 6.6371. Dudley earlier on Monday said he expected 2 percent growth over the next 18 months after a “sluggish” second quarter.

Asian shares ticked up slightly on Monday, while the dollar index, which tracks the greenback against a basket of six rival currencies, was up 0.1 perc ent at 95.654, crawling away from its Friday low of 95.384, its lowest since July 5.

TD Securities looks for gold and silver to remain well supported even when the Federal Reserve decides to hike interest rates again.

“Near-term risks to the economic outlook have diminished”, the Fed said in a policy statement after the July 27 FOMC meeting and noted that there are now fewer reasons to be anxious about the USA economy.

They touched three-month lows on Friday to end July on a monthly decline of almost 15 per cent, the biggest monthly loss in a year for U.S. crude, undoing some of the strong recovery seen in the first half of the year from 12 year lows. A rate hike just days before the November 8 election could be seen as an attempt to signal to voters that the USA economy is gaining strength.

GDP increased by 0.6 per cent in the three months to June compared to the previous three months.

The seasonally adjusted jobless fell by 7,000 from June to 2.68 million in July.

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