Gold Price Falls Below $1,800: A brief overview

Introduction

Welcome to our latest Gold news series, where we bring you short and sweet news updates on the global economy and gold market. Today's news discusses last week's fiasco that saw Gold price fall below $1,800 US Dollars per Ounce.

What exactly happened?

The 2nd quarter of the year report announced by the (DOL) Department of Labour (US) has indicated that unemployment figures over the year have decreased from 5.9% to 5.4%. Indications of President Biden's recovery plans may be working in stimulating the economy.
The sectors that have noted the highest employment are leisure and hospitality, local government departments, and professional and business services.
DOL has also noted that US payrolls have increased and subsequently performed better than market expectations. July saw a 4% increase in average hourly earnings compared to its previous month (June) of 3.7%.

What does this mean?

The recovery of the US labour market has altered the perspective of the market and investors.
The market and investors have been speculating an earlier taper date as near as September.
"Tapering" refers to the reduction in the size of its bond-buying program (QE) quantitative easing.
The effect of tapering back would see higher interest rates and the increased opportunity cost of holding non-interest-bearing assets such as gold.
The outcomes would see investors switching their investments into interest-bearing assets to gain more profits.