Market participants will likely need some time to digest the latest US non-farm payrolls data released last Friday. The May figure was significantly higher than the consensus expectation of 85,000, reaching 172,000, and the previous figure was revised upwards from 115,000 to 179,000. This data strongly suggests that investors have grounds to believe the Federal Reserve will raise interest rates. Coupled with the current high US oil prices, raising interest rates to curb inflation is within the Federal Reserve’s purview, and therefore justified. Consequently, for interest rate-sensitive gold investors, there is currently a lack of incentive to aggressively buy gold. In the short term, gold prices may need to repeatedly test the support level of $4,283 before gradually entering the market to buy on dips.

A position can be established around $4,283, with a short-term target of $4,385 for profit-taking and a stop-loss at $4,263.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com