Gold has posted strong losses in the Tuesday session. In North American trade, the spot price for an ounce of gold is $1328.04, down 0.86% on the day. On the release front, JOLTS Jobs Openings slowed to 5.81 million, well off the estimate of 5.95 million.
Gold prices moved higher on Monday, following a massive sell-off on global stock markets. A key factor in the stock market slide was strong employment numbers on Friday, as nonfarm payrolls and wage growth reports beat their estimates. Investors shied away from the stock markets, concerned that the sharp data could lead to higher inflation, which in turn would result in more rate hikes this year. Higher interest rates make the dollar more attractive for investors, at the expense of the stock markets. However, US stock markets are back in green territory on Tuesday, which has stemmed the gold rally.
The Janet Yellen era is over at the Federal Reserve. On the weekend, Jerome Powell took over as chair, replacing Yellen. On Friday, Yellen waxed optimistic about the economy, saying that strong growth, a red-hot labor market and increased wage growth would require the Fed to gradually raise interest rates. Powell is expected to continue to Yellen’s policies, so the markets are not expecting any dramatic shifts. However, the massive US tax cut will have a strong impact on the US economy, and the markets will be looking to the Fed for guidance. If the Fed sounds optimistic about the tax reform package, the US dollar could move higher.
