By Dave Brown — Exclusive to Gold Investing News
Gold prices weakened earlier this week as a result of China reducing growth estimat es to a seven-year low of 7.5 percent. The gold price has recovered slightly following promising United States payroll data and rekindled optimism that Greece will complete a crucial bond swap deal. The spot market gold price traded in the range of $1,698.30, above its 200-day moving average of around $1,678. On a relative basis, the current price of gold represents a 1.2 percent total decline from the last week. Precautionary note For gold investors, a “sterilized” bond buying policy, which is reportedly under consideration by the US Federal Reserve, could diminish gold's traditional appeal as an inflation hedge against shrinking portfolio value. The purpose of this new bond program would be to reduce the concern of future inflation if the Fed elects to initiate plans to boost the economy in the months ahead, and could mean that investment in gold positions will move toward dollar-denominated assets. Future announcements The US Bureau of Labor Statistics is planning to release an Employment Situation Report for February on March 9 which takes into account the Civilian Unemployment Rate as well as the non-farm payroll employment rate as labor market indicators. The Civilian Unemployment Rate is a lagging indicator of the general economy which measures the number of people who are unemployed as a percentage of the labor force. Meanwhile, the non-farm payroll employment rate, is a coincident indicator based on the number of paid employees in the nation's business and government establishments. The report is considered the single best way to understand the state of the labor force in the US at any point in time. If the data is considered to be below consensus expectations, gold prices could strengthen further on market risk sentiment.