Gold Prices Soar as Weaker Dollar and Lower Labour Data Reduce Rate Hike Bets
Gold prices surged on a weekly basis as the US dollar weakened and weaker-than-expected US labour data cut the odds of further US Federal Reserve tightening. On Friday, gold futures (October) gained 0.11 per cent while silver futures (September) advanced 0.15 per cent on the Multi Commodity Exchange (MCX). The price of 10 grams of 24-carat gold was at Rs 1,49,621 on Friday, up from Rs 1,42,863 seen on Monday at market opening.
The softer labour picture, together with weaker ADP private payrolls and other employment indicators, trimmed market expectations for a September Fed rate hike to about 44 per cent from roughly 58 per cent. Treasury yields fell in response, with the benchmark 10-year yield easing to around 4.60 per cent from an intraday high of 4.68 per cent.
According to analysts, gold and silver benefited from declining Treasury yields and a softer US dollar. Gold staged a sharp reversal after the employment report, climbing to a seven-week high. Immediate resistance is placed at $4,470, $4,500 for COMEX gold, while support lies at $4,330, $4,300.