Gold rallies to 7-week high as traders eye key US jobs data for Fed clues

2 Feb 2024 , 12:03 PM

As the dollar and Treasury yields declined on Friday, gold prices were poised for their best week in seven. Traders were also waiting for the release of important U.S. jobs data later in the day to see when the Federal Reserve could begin reducing interest rates.

Spot gold remained unchanged at $2,053.09 an ounce. Nevertheless, the contract has increased 1.8% this week and, if gains continue, may record its largest weekly gain since late December.

The ounce of U.S. gold futures remained unchanged at $2,070.30.

Spot gold increased by about 1% on Thursday following the release of U.S. Labour Department data indicating that initial jobless claims increased last week more than anticipated.

A different analysis revealed that, in the fourth quarter, U.S. worker productivity increased more quickly than anticipated.

At 1330 GMT, investors’ attention will turn to the non-farm payrolls data from the United States.

Concerns about the U.S. regional banking industry also helped to bolster bullion, boosting demand for safe-haven investments like Treasury bonds and gold. [G

Benchmark 10-year Treasury note yields, which are negatively correlated with bond prices, continued to hover around 2024’s lowest levels.

This week, the dollar index has down 0.4% thus far. 

While abandoning a long-standing allusion to potential future rate hikes, the U.S. Fed resisted the notion of cutting interest rates in the spring and instead voiced confidence that inflation would move towards the targeted 2% level.

Money market pricing, as indicated by LSEG’s interest rate probability app IRPR, indicates that traders are confident in a rate cut in May. 

Reduced interest rates increase the allure of non-yielding bullion. 

Spot silver decreased 0.3% to $23.10 per ounce, palladium increased 0.1% to $962.91, while platinum decreased 0.5% to $908.55.

For feedback and suggestions, write to us at [e-mail]