Gold firms as U.S. jobs data miss cements low rates view
· Gold prices inched higher on Monday to trade near a three-month peak hit last week after weaker-than-expected U.S. jobs data supported hopes that interest rates will remain low for some time, bolstering the metal’s appeal.
· Spot gold was up 0.2% at $1,834.96 per ounce by 0528 GMT, after hitting its highest since Feb. 11 at $1,842.91 in the previous session.
· U.S. gold futures were up 0.2% at $1,835.00 per ounce.
· “The U.S. jobs report is pretty much the start and finish of the story for gold at the moment. It has really tightened expectations out of the market, at least at the margins of Federal Reserve rate hikes,” IG Market analyst Kyle Rodda said.
· With the momentum to the upside, $1,850 will be the next key level to watch for gold, he added.
· Data released on Friday showed U.S. job growth unexpectedly slowed in April, as businesses scrambled for workers and raw materials amid rapidly improving public health and massive government aid.
· The 266,000 jobs that U.S. firms added last month were “nowhere near” expectations, a Federal Reserve official said.
· The U.S. central bank has pledged to keep interest rates low until inflation and employment pick up.
· Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar.
· The dollar index languished near a more than two-month low.
· Spot gold may test a resistance at $1,847 per ounce, a break above which could lead to a gain to $1,876, according to Reuters technical analyst Wang Tao.
· Indicative of sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.6% on Friday.
· Speculators raised bullish bets in COMEX gold and silver contracts in the week to May 4. [CFTC/]
· Gold Price Analysis: XAU/USD to benefit from lower US yields, eyes $1,851
Gold has been extending its gains after breaking above $1800 beforehand and changes hands near $1840. The yellow metal eyes additional upside – XAU/USD is set to test 200-DMA at $1851 amid US dollar’s dead cat bounce, FXStreet’s Dhwani Mehta reports.
“Gold traders are taking a breather before resuming the uptrend. In absence of significant economic data from the US, gold prices will continue to remain at the mercy of the dollar and yields.”
“The odds remain in favor of the bulls, as they keep their sight on the 200-daily moving average (DMA) at $1851. Ahead of that the gold price needs to take out Friday’s high of $1843. Only a daily closing above the 200-DMA could call for a retest of the $1900 psychological barrier.”
“The Relative Strength Index (RSI) lies just beneath the overbought region, currently at 68.44, pointing to additional upside potential.”
“If the correction regains momentum, gold prices could fall back towards Friday’s low of $1813. The $1800 threshold could emerge as strong support for the XAU buyers.”
· Palladium rose 0.3% to $2,934.15. Silver gained 1.1% to $27.74, while platinum was up 0.6% at $1,256.27.
· Recovery from coronavirus will be long, says ECB Economist Lane -Le Monde
The road to recovery from the coronavirus pandemic will be long with the unemployment rate in the euro zone not returning to its 2019 level before 2023, ECB Chief Economist Philip Lane told French newspaper Le Monde in an interview.
He also said the euro zone’s gross domestic product (GDP) will not return its 2019 level before spring next year.
· ‘Cautious hugging’ and pints: UK PM Johnson to ease England’s lockdown
· Japan's Q1 GDP likely slipped back into decline as new COVID curbs hit
Japan's economy likely shrank in the first quarter as the hit to consumption from coronavirus curbs offset the boost from robust global demand, a Reuters poll showed, highlighting the country's slow recovery from a pandemic-induced slump.
The world's third-largest economy is expected to have contracted by an annualised 4.6% in January-March, according to a Reuters poll, following an 11.7% jump in the previous quarter.
· S.Korea's Moon says 'time to take action' on N.Korea ahead of summit with Biden
· Singapore’s foreign minister says Covid won’t go away completely, warns against complacency
· Saudi Arabia's GDP contracts 3.3% in Q1 on oil output, non-oil economy recovers
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