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Gold prices rose sharply today, departing from the six-week low, and almost completely offsetting the decline yesterday, which was associated with the release of weak data on the U.S. labor market, which led to slightly revise projections for changes in rates by the Federal Reserve.
The U.S. Labor Department said that the pace of hiring by American employers slowed in July but remained high, while employment growth was broad-based, indicating continued improvement in the labor market and the economy as a whole. Non-agricultural employment grew by a seasonally adjusted 209,000 last month. The unemployment rate, obtained by a separate survey of households, rose to a seasonally adjusted 6.2% in July from 6.1% in June. The unemployment rate fell by 1.1 percentage points from July 2013, when it was 7.3%. Economists had expected employment to increase by more 230,000 and the unemployment rate will remain at 6.1%. Employment rose by 298,000 in June, which was revised from earlier estimates of 288 000 and a gain in May was revised up to 229,000 from the earlier estimate of 224,000. Increase employment averaged 245,000 over the past three months, compared with an average of 209 000 for the 12 months ended in June.
Meanwhile, we add that the course of trade affects the weak demand for physical gold in Asia, despite the fall in prices on Thursday. Recall that China is a major contributor to the increase in demand for gold in the world. As reported by Reuters, the demand for gold jewelry in China in the second quarter of 2014 shows a decline for the first time in eight years. Experts expect that gold consumption in the country for the year could fall by 20% due to the weakening of the yuan and reduce the excitement of the gold market, which broke out in April last year, after a sharp fall in prices for precious metals.
"Currently, the Chinese do not rush to buy gold, because they believe that its value has decreased enough" - said Sarah Zhao, an analyst at Thomson Reuters GFMS. He also added that if the gold to continue to fall in price and fall below $ 1,200 per ounce, the buyers return to the market again.
It should be noted that since the beginning of the year, gold prices rose by 6.6 percent, but much of this success has been noted in the first quarter. By the end of June the price of the precious metal fell by 3.4 percent, while fixing the largest monthly decline since the beginning of 2014.
The cost of the August gold futures on the COMEX today rose $ 4.14 - to $ 1295.30 per ounce.
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