Gold rises on risk aversion ahead of U.S. jobs data Global
gold markets rose on Wednesday for the second day in a row, supported by risk aversion among investors, as investors await crucial U.S. economic data that will determine the future course of central bank policy.
Gold rises today and what the markets are waiting for Gold
prices rose 0.6% to near $4,098 an ounce, benefiting from the cautious mood in financial markets.
The rally comes at a very sensitive time, as investors are awaiting two key events:
- The Federal Reserve meeting minutes to be released later today by the U.S. monetary institution.
- The September nonfarm payrolls report, due out on Thursday after being postponed due to the government shutdown.
Supporting factors
Several factors have contributed to the demand for gold as a safe haven:
1- U.S. unemployment data: The latest data revealed that the number of jobless claims rose to a two-month high in mid-October, raising concerns about the strength of the labor market.
2- Interest rate environment: Gold, as a non-yielding asset, tends to perform well in a low interest rate environment, especially in periods of economic uncertainty.
3- Investor expectations: CME Group's FedWatch tool indicates that traders currently expect a 49% probability of a rate cut at next month's Fed meeting.
Future outlook
Gold remains a safe haven in times of volatility, with risk aversion limiting the decline in prices at the start of the week.
All indications are that the upcoming US economic data will play a pivotal role in determining the short-term direction of gold prices.
