US job growth unexpectedly slowed in April, likely curbed by shortages of workers and raw materials as rapidly improving public health and massive government aid fuelled an economic boom. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
The dollar index languished near a more than two-month low versus major peers, making gold less expensive for other currency holders. The dollar index against a basket of six major currencies edged up to 90.252 but was still near its weakest since Feb 25.
Physical gold demand in India dived last week as shops shuttered and people turned cautious due to surging coronavirus infections across the world’s second-largest bullion consumer.
Gold futures on MCX were up 0.09 per cent or Rs 49 at Rs 47,794 per 10 grams. Silver futures rose 0.80 per cent or Rs 568 to Rs 71,997 per kg.
“COMEX gold trades little changed near $1832/oz after a 0.9 per cent gain on Friday. Gold remains supported by disappointing US non-farm payrolls data which has pressurized the US dollar and increased expectations that the Fed may keep interest rates low. Gold has also benefitted from ETF inflows which showed pick up in investor buying,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
“However, weighing on price is concerns about Indian demand and general improvement in virus situation in the US and Europe. Gold has been setting new highs indicating positive momentum and this may continue until US dollar is under pressure.”
In the spot market, highest purity gold was sold at Rs 47,484 while silver was priced at Rs 70,835 on Friday, according to the Indian Bullion and Jewellers Association.
Trading strategy
“We expect gold prices to trade higher with COMEX gold support at $1800 and resistance at $1850 per ounce. MCX Gold June futures support lies at Rs. 47400 and resistance at Rs. 48200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was up 0.1 per cent at $1,831.72 per ounce by 0131 GMT, after hitting its highest since Feb 11 at $1,842.91 in the previous session. US gold futures were up 0.2 per cent at $1,834.00 per ounce.
Palladium rose 0.3 per cent to $2,934.58 per ounce. Silver gained 0.8 per cent to $27.65 per ounce, while platinum was up 0.6 per cent at $1,256.47.
