Gold is much cheaper now

Gold prices fell nearly 2 percent, updating the minimum of the month, which was caused by increased demand for the US dollar and profit-taking after Friday's rally.

Recall, on Friday, gold has risen in price against the background of a weak US market report, which showed that in April, the economy added the fewest jobs in seven months. Against this background, it increased the likelihood that in the coming months, the Fed will refrain from tightening monetary policy in anticipation of stronger growth indicators of the US economy and the global economy. Recall, low interest rates support gold prices, which does not bring interest income to investors. The increase in rates, in turn, would contribute to the growth of the dollar and have reduced the demand for gold.

"The dollar has started to recover gradually reason why the dollar has not got a massive sell-off after data on the labor market, also made some investors nervous about the positioning of gold." - Said an analyst at ABN Amro Georgette Boele.

The dollar index, which reached a 16-month low last week, rose 0.3 percent today, showing a rather muted reaction to the mixed employment report. Strengthening of the dollar contributed to the statements of the President Federal Reserve Bank of New York William Dudley. He noted that the Central Bank may still raise interest rates twice this year. He also said that the employment data do not signal that the US economic recovery got away from the course on the eve of the next meeting of the FOMC, which will be held June 14-15. Also today, the Federal Reserve Bank of Chicago President Charles Evans said that the fundamentals of the US economy are "solid" and growth this year should accelerate to about 2.5 percent. However, Evans said that although the US economy looks healthy, he would still like to see more tangible evidence that inflationary pressures are strong enough to achieve the inflation target. "In my opinion, it is reasonable to continue to sit on the fence" - said Evans.

A slight influence also had the data of the Central Bank of China, which showed that the gold reserves in the end of April amounted to 58.14 mln. Troy ounces compared to 57.79 million. Troy ounces at the end of March.

The cost of the June gold futures on the COMEX fell to $ 1267.3 per ounce.