Weak US labour market data lead to a short-term rise of the gold price

The gold price rise at the end of last week was due to the significant depreciation of the US dollar against the euro following the publication of labour market data in the US. The price rose temporarily above the $1,100 per troy ounce mark last Friday and is trading only marginally below this level as the new week gets underway. 

The Employment Cost Index (ECI) for the second quarter was surprisingly weak, for example, so there is no sign of rising wage pressure. The hope of the US Federal Reserve, however, is that the recovery on the labour market will ultimately generate stronger growth in wages and thus lead to higher inflation in the medium term. 

"This hope has now been somewhat dampened, meaning that there are increasing doubts that there will be any turnaround in interest rates in the US in the near future. Once again, considerable outflows from the gold ETFs blocked any more significant or lasting increase in the price of gold", says Commerzbank. 

Outflows of 10.7 tons were recorded on Friday, the majority of them attributable to the SPDR Gold Trust, the world's largest gold ETF. Speculative financial investors also remain very pessimistic towards gold: in the week to 28 July they expanded their net short positions by 8% to a new record high of 14,600 contracts.