The smile on the investors is back, as Gold prices increased this week following sharp fall in US job rate. The weak job data has further deterred the preparations of US to prop up the economy. One of the major factors for slow job growth is sluggish manufacturing sector. Manufacturing sector is the backbone of economy and due to growing industrialization plus globalization; it is considered the driver of employment. A survey conducted by US employers has revealed that the month of May witnessed only 69000 jobs in job market, the weakest month in the entire year. The unemployment rate has increased up to 8.2%, which is the first increase since June 2011. The unemployment reports has triggered alarms in the Obama’s administration, as US is gearing up for the election in November this year. International gold prices have climbed in recent times owing to the expectations of additional financial reduction by the world's central banks in reaction to sluggish national and regional economies.
Commodities like oil and metal also fell sharply making ways clear for the gold prices. No one expected the sudden and abrupt increase in the gold price in only one day. The price change in only single day is the biggest gain in 2 years. The international gold price is expected to regain its lost glory in the coming months. The dwindling Euro Zone and weakening Chinese economy has certainly helped the gold to recuperate its safe haven status. Gold market is expecting that importunate bad news via European Central Bank Meeting can boost the price of the gold. European countries and Germany are looking for effective strategies to rescue Spain debt-stricken banks. As the gold market is started to bloom furthermore, other precious metals like silver and platinum also climbed sharply to 3%. Presently gold is hovering between $1615 and $1638, which gained 1.03% increase.
The sharp increase in international gold prices incited huge waves of scrap selling in Asia especially in India. India will experience record 400 tonnes scrap sales this year. On the other hand, high prices hindered new buyers, as fresh buying was very slow. India was top gold consumer until the first quarter of the year when China surpassed it. The rupee momentous low value against the US dollar has significantly increased the gold price regardless of extremely low demand. India will experience low gold demand in upcoming months due to commencement of monsoon and lackluster wedding season. The gold import is high in China, as it has a great capability to maintain gold imports even during the depleting economy. Investors are awaiting ECB meeting, which is scheduled in next month that can reduce interest rates. Meanwhile, US Federal Reserve is expected to declare monetary easing providing fresh boosts to the gold prices in the coming days. Nevertheless, the prospect of gold market looks bright and fascinating.