The dollar has skidded in the currency market following Friday's publication of downbeat NFPR statistics in the USA. On Friday US Labour Department announced a 38,000 increase in non-farm payrolls in May against a forecast of 164 000. May's increase turned out to be the weakest since September 2010.
Gold spot prices exceeded a value of 1240.00 USD per ounce on Friday. Following COMMEX trades, August’s gold futures quotes grew 2.5% to 1242.90 USD per troy ounce showing the most important daily growth since 17th March.
Today market participants' attention will be riveted on Fed head Jannet Yellen's statement (18:30, GMT 2) that will touch upon US monetary police considering the US latest labour market statistics. Interestingly, the Boston Fed President Eric Rosengren proclaimed on Monday that he still expected an interest rate rise in a few months despite a slower job growth.
He mentioned that even though May's growth of 38,000 is a disappointing result, the current unemployment rate of 4.7% corresponded to his idea of full employment and inflation may grow if the decline in unemployment continued. However, most market participants think that US interest rate hike is hardly possible after weak NFPR data.
Higher interest rates normally put pressure on gold as it stops yielding interest and becomes less attractive as compared with more profitable assets with borrowing costs increased.
Gold sellers were caught off guard by US weak labour data. Now market participants will assess further prospects of the US monetary policy.