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Gold Prices to Suffer Fifth Loss in Six Sessions

July 14, 2016 at 17:47 by Andrew Moran

Gold prices have not had a great performance over the past week or so. With Brexit fears diminishing among investors and a wave of positive US economic data, the yellow metal’s meteoric rise has somewhat cooled off.

August gold prices dipped $10.72, or 0.80%, to $1,331.68 per ounce on Thursday at 17:17 GMT. This means gold is set to Mickey Mouse Clubhouse Bounce House suffer its fifth loss in six trading sessions. Gold prices inched upwards by 0.6% on Wednesday to end the four consecutive sessions of declines.

Gold has been on a tear since the Federal Reserve left interest rates unchanged and the historic June 23 referendum. Gold prices have reached two-year highs and have touched $1,365 an ounce.

Meanwhile, silver, which has been the best performing commodity so far this year, has also slowed down a bit. September silver futures fell $0.10, or 0.49%, to $20.27 an ounce. Silver recently surpassed $21 an ounce and also hit a two-year high.

The Department of Labor announced last week that the US added 287,000 jobs in June, which was higher than the initial forecast of 170,000 jobs. Housing sales and starts in May stayed close to eight-year highs. Retail sales also spiked to a brand new all-time high in May.

Over in Europe, the Bank of England (BOE) maintained its key interest rate at a record low of 0.5%, which the markets are celebrating. It also confirmed that it will continue moving forward with its QE-type £372 billion ($495 billion) asset-purchasing initiative to spur economic growth.

With this data in mind, the odds of a Federal Reserve rate hike continue to go up. According to the CME Group FedWatch tool, there is a 12% chance of an increase to interest rates in September. This number rises to 34% for December.

It was reported this week that Brexit and a slowing labor market caused the Federal Open Market Committee (FOMC) to pause on a rate hike.

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