Falling stock markets prevent a price decline in gold

Attention on the gold market is likely to be focused today on the US labour market figures for July. The Fed Fund Futures are currently pricing in a roughly 50% probability of a Fed rate hike in September. 

"If this probability were to be raised and the US dollar were to appreciate following publication of the data, the gold price would doubtless find itself putting its late July 5½-year low of $1,077 per troy ounce to the test", says Commerzbank. 

Weaker equity markets were presumably the main reason why the gold price has been largely able to defy the increased rate hike expectations in recent days. The Dow Jones Industrial Average for example closed at a six-month low yesterday following its sixth consecutive daily fall. 

"If equity markets come under further pressure after the employment figures are published, this should preclude lower gold prices", added Commerzbank.