Gold cracked towards the low of November, where postmodern vaccine, it was sold out to $1767. Now the situation is slightly different since U.S Job situation has been improving gradually. New stimulus package in the US will help sustain jobs and economic growth. That’s why gold slipped and we need to address caution says most of the top gold dealers in India. But before that, markets were also waiting for the key jobs numbers.
The Friday US Jobs report was pretty worrisome for the policy maker. The payrolls for Jan 21 was 49K against expectations of 85K and the unemployment rate shot up to 6.3 % as the low profile job additions were high. Still the Nov and Dec 2020 negative adjustment was not showing a healthy sign on job situation. Its impact was seen largely on USD index which tumbled from 91.65 to 90.9.
Last Friday, the US employment report showed a smaller than expected increase in jobs across the country, raising concerns of a slowdown in the labor market that could potentially impede recovery in the world’s largest economy following the coronavirus crisis.
The disappointing figure sent the US dollar lower after it had touched a two-month high over the past few sessions, helping boost gold prices.
Spot gold rose 0.1% to $1,813.99 per ounce and U.S. gold futures gained 0.2% to $1,816.50 during Monday’s trading session.
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 believes analysts from RSBL.
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.
Early on Monday, gold prices are on the rise on the back of a disappointing employment report which brought back worries about the pace of economic recovery in the US and weakened the US dollar.
The weaker jobs report also supported the safe haven appeal of gold as it further highlighted the weakness caused to the US economy by the coronavirus pandemic, which remains ongoing despite the rollout of vaccines. Key sectors of the economy, manufacturing and construction, suffered the most severe job losses.
Prices were also climbing higher on the back of improvement in demand for physical gold among consumers in China and India. The upcoming Lunar New Year holiday in China has spurred sales of gold while Indian retail consumers spent more on gold after its domestic rates slid lower.
Another significant factor that triggered gold was Bitcoin. The BC bulls got an electric jolt to the upside when it was just announced that Tesla has invested $1.5 billion in Bitcoin and that the electric vehicle maker will incorporate Bitcoin into its operation. Gold prices also pushed higher about the same time the Tesla news came out.
This week can show significant movement in gold as Wednesday is a packed day, as Fed Chair Powell will also be speaking about the labor market at a webinar hosted by the Economic Club of New York. Later that evening, the U.S. Federal Budget Balance will be published, while on Thursday, initial jobless claims numbers will be released.
Gold prices are the cusp of a breakout or stalling at the low $1,800s this week, depending on U.S. inflation data and a speech by Federal Reserve Chair Jay Powell that could set the tone for longs trying to find their feet after last week’s shake-up in the yellow metal.
Any of these data releases, along with Powell’s speech, could determine the direction and velocity for gold this week
No comments:
Post a Comment