The Fed may move to begin reducing its support for the economy next month despite a sharp slowdown in jobs gains last month as the latest US surge in Covid-19 cases crested and began to recede.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold is range bound as support from choppy US dollar post mixed US non-farm payrolls report is countered by higher bond yields.
Gold futures on MCX were down 0.23 per cent, or Rs 108, at Rs 46,929 per 10 gram. On the other hand, silver futures marginally eased 0.08 per cent or Rs 50 at Rs 61,751 per kg.
Gold prices traded firm, before paring gains. Gold prices rallied after disappointed US job numbers. However, prices capped upside with a surge in US bond yields. US Treasury yields were trading higher.
Ravi Singh, Vice President & Head of Research, ShareIndia, said US non-farm payrolls rose by 194,000 in September compared to expectations of 500,000. “The unemployment rate fell to 4.8 per cent, better than the expectation for 5.1 per cent and the lowest since February 2020. Gold prices edged higher on Friday but closed well off the day highs,” he added.
Physical gold rates in India flipped to a discount for the first time in over two months last week as a rise in local prices curbed demand, while buying in China was expected to pick up after the Golden Week holiday.
In the spot market, highest purity gold was sold at Rs 46,980 per 10 gram while silver was priced at Rs 61,080 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal remained almost flat in the last couple of weeks, whereas silver too eased during the period under review.
Sandeep Matta, Founder, TRADEIT Investment Advisor, said “Gold prices jumped during the initial trading hour post the release of weaker jobs data. The employment report may potentially put a brake on the Federal Reserve’s plan to shift its monetary policy before the end of the year.”
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,750 and resistance at $1,775 per ounce. MCX Gold December support lies at Rs 46,800 and resistance at Rs 47,400 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was flat at $1,756.25 per ounce by 0053 GMT. Prices hit a two-week peak on Friday after the payrolls data but pared gains during the session. US gold futures were unchanged at $1,756.80.
Spot silver fell 0.1% to $22.64 per ounce, while platinum eased 0.4% to $1,022.42. Palladium rose 2.6% to $2,130.94, having earlier hit a high since September 13.
