Gold fell sharply on Tuesday after reports indicate that consumer confidence in June was better than expected. The US Conference Board said the index rose to 127.3 points, instead of only 120 points. This strong data raised dollar up, which accordingly pushed demand for the yellow metal down.
Other obstacle for gold is the growing yield on US Treasuries.
Obviously, these are not the best times for gold, and this is evident with the massive sell-off that occurred in the market last week, when Federal Reserve said there may be two rate hikes in 2023.
A similar scenario may happen again this week because on Friday, US will publish its latest data on employment, which may post a 700,000 increase in jobs and 5.7% drop in the unemployment rate.
But short-term employment forecasts show that those who expect an increase in jobs dropped from 27.7% to 25.7%, while those who expect fewer jobs fell from 17.5% to 16%.
Real inflation rates will also remain distorted, which will make it difficult for the Fed to calculate inflation expectations correctly.
Aside from that, consumer optimism should also be monitored as it is a leading indicator of economic growth. The more optimistic consumers are, the more likely they are to spend money.
