BENGALURU: Gold prices gained on Friday, helped by a technical rebound after a nine-day losing streak, although robust US jobs data raised worries over another US rate hike and kept bullion on track for its second weekly drop. Spot gold was up 0.6% at $1,831.09 per ounce by 1:41 p.m. EDT (1741 GMT) but on track for its second straight weekly loss, down 0.9% so far. US gold futures settled 0.7% higher at $1,845.20 per ounce.
Benchmark Treasury yields headed for a weekly increase, denting the appeal of gold.
The bounce in gold prices despite the strong jobs data indicates that selling pressure has been exhausted and there is covering of short positions, said Tai Wong, a New York-based independent metals trader.
Gold prices fell as much as 0.5% earlier in the session after the US Labour Department’s report showed non-farm payrolls increased by 336,000 jobs in September on a monthly basis, beating expectations of 170,000 additions, according to a Reuters poll of economists.
Traders are pricing in around a 29% chance of another rate hike from the Fed this year, according to the CME Fedwatch tool. Higher interest rates increase the opportunity cost of holding bullion. With the recent rally in bond yields and the dollar, it is difficult to build a bullish case for gold, Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note.
But “we maintain a patiently bullish view on gold with the timing for a fresh push to the upside being very dependent on US economic data as we wait for the FOMC (Federal Open Market Committee) to turn its focus from rate hikes to cuts,” Hansen said.
Source: Brecorder
