Gold rises as bleak U.S. jobs data dents dollar
· Gold prices edged higher on Monday, as weaker-than-expected U.S. jobs data re-ignited concerns over a recovery in the world’s largest economy, pressuring the dollar and boosting bullion’s appeal.
· Spot gold rose 0.1% to $1,813.99 per ounce by 0040 GMT. U.S. gold futures gained 0.2% to $1,816.50.
· The dollar fell from an over two-month peak on Friday after a U.S. jobs report indicated a slow recovery from the impacts of the COVID-19 pandemic. A weaker dollar makes gold cheaper for holders of other currencies.
· The employment report on Friday showed job losses in manufacturing and construction, two sectors which have been propping up the economy.
· U.S. President Joe Biden and his Democratic allies in Congress forged ahead with their $1.9 trillion COVID-19 relief package on Friday.
· Capping gold’s gains, yields on the benchmark 10-year Treasury note soared to levels not seen in nearly a year. Higher yields increase the opportunity cost of holding non-yielding bullion.
· Breakevens on 10-year Treasury Inflation-Protected Securities, which measure average annual inflation expectations for the coming decade, have jumped to 2.19%, the highest level since mid-2018.
· Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Feb. 2, data showed on Friday.
· Physical gold demand picked up in China last week ahead of the Lunar New Year festival, while Indian retail buyers cheered a sharp dip in domestic rates.
· Gold Price Analysis: XAU/USD holds on to recovery gains above $1,800 amid mixed clues
Gold takes the bids near $1,818.50 amid the initial Asian trading on Monday. In doing so, the yellow metal extends Friday’s run-up despite mixed risk catalysts and a lack of major data/events.
Bulls cheer US dollar pullback…
Among other things, the US dollar index (DXY) pullback from a two-month high seems to be the strongest factor favoring the bullion’s latest recovery moves. The greenback gauge dropped heavily after the American employment data for January marked mixed results with a drop in Unemployment Rate and revised down previous readings for the headlines Nonfarm Payrolls (NFP).
Looking forward, a lack of major data/events in Asia keeps the gold traders searching for a major push to hold the latest gains above $1,800.
Technical analysis
Unless bouncing back beyond the 10-week-old rising trend line, currently around $1,819, gold prices stay directed towards the November 2020 low of $1,764.60.
· Spot silver gained 1.1% to $27.12 an ounce, platinum rose 0.7% to $1,130.91 and palladium was steady at $2,336.29.
Thai
Eng