After last Friday’s dismal jobs report, it’s likely that the June rate hike is now off the table. For months, a June rate hike was extremely likely, since the economy seemed to be improving, however, Friday’s non-farm payroll showed only 38,000 new jobs added in May, the lowest monthly gain since 2010, and a drastic decline from the expected 162,000 new jobs. Yellen announced in a speech in Philadelphia that a rate hike was unlikely now, considering the state of the economy.
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Meanwhile, the Brexit issue heated up this week. Discussions focused around the upcoming vote to decide whether Britain will leave the European Union. The sentiment for leaving edged up by 3% on Monday. Sales of gold bars and coins have risen in London as a result.
Billionaires like George Soros have been notable recently for investing huge amounts of money in gold. Soros recently invested $475 million in Barrick Gold.
On Thursday the gold price hit a three-week high on Brexit fears and bets against a Federal Reserve rate hike, rising to around $1,270 per ounce. The yellow metal has pulled ahead by 20% since the beginning of the year.
Friday saw gold prices hit four-week highs above $1,275 per ounce as world stock markets dropped on nervousness ahead of the FOMC meeting next week.