Gold Prices: Volatility of precious commodity in the light of U.S. jobs report


Precious metals are being supported at lower levels by weakening US equity markets brought on by weak corporate profits and cooling US bond yields, according to Manoj Kumar Jain of Prithvi Finmart Commodity Research.

Current price patterns of gold and silver

As markets processed recent remarks from Federal Reserve Chair Jerome Powell, gold prices ticked up on Friday in the international markets. However, the precious metal was on track for its worst weekly decline since November after a 2% decline the previous day.

By 00:42 GMT, spot gold had increased 0.2% to $1,916.34 per ounce after falling 2% the previous day in a sell-off spurred by a strong dollar and profit-taking. To $1,915.60, US gold futures declined by 0.1%.

U.S. employment report as a determining factor

According to Rahul Kalantri, VP Commodities, Mehta Equities, after gold achieved a new high in the domestic market and silver reached a four-week high overnight, gold and silver both ended lower on Thursday due to profit taking by shorter-term futures traders. 

The U.S. dollar index’s recovery after its pounding on Wednesday also worked as a bearish factor for precious metals.

The interest rates were increased by 0.5% on February 2 by the Bank of England and the European Central Bank. The actions were expected. Profit-taking in precious metals was triggered by the recent fall in US unemployment claims. The US employment status report for the month of January, which is due out today, will determine the way forward.

Expectedly hiked interest rates and better-than-expected decreasing inflation

Gold Prices

NS Ramaswamy, Head of Commodities, Ventura Securities supposed that following a session sell-off from the nine-month high of $1,975, COMEX gold is currently trading flat in Asian markets. 

The dollar index has recovered from its recent low of 100.70 and is currently trading at 101.71. The European Central Bank, meanwhile, increased interest rates by 50 basis points, as was generally predicted. While other data showed a rise in US auto sales in January, the prior week’s jobless claims unexpectedly decreased.

Investors’ predictions that inflation will fall more quickly than expected were reevaluated in the wake of today’s better-than-expected jobless claims number and worries about strong nonfarm payrolls data. Support for COMEX gold is located near $1,912; resistance is located at $1,958. Prices are anticipated to start around Rs 57,700 on the domestic front.

A cap on precious metal gains

Meanwhile, according to Manoj Kumar Jain, Prithvi Finmart Commodity Research, after the dollar index rebounded, the price of gold dropped from nine-month highs and the price of silver dropped from four-week highs. 

In addition to increasing interest rates by 50 basis points, the Bank of England and the European Central Bank have also put a cap on precious metals gains. Precious metals are currently being supported at lower levels, meanwhile, by the weakening in the US equities markets brought on by underwhelming corporate profits and a decline in US bond yields.

Ahead of the US jobs announcements, they anticipate that gold and silver will continue to be volatile in today’s session. Silver might maintain levels of $23 per troy ounce, while gold could maintain levels of $1900 per troy ounce.


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