Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Gold Has Best Week Since October on U.S. Payrolls Shock

CommoditiesMay 07, 2021 04:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com - Gold had its best week in six months as shockingly low U.S. payrolls numbers for April, coupled with the yellow metal’s belated catch up to inflationary trends, gave it a gain 3.5% on the week.

Price-wise, gold was nearing peaks last seen 12 weeks ago, closing in on the $1,850 per ounce level, that could set up a return to $1,900 and ultimately the $2,000 record highs attained in August.

“Gold’s short-term momentum could make a run towards the $1,857 level, which could be followed by a move towards the $1,925 resistance level,” said Ed Moya, head of research for Americas at online trading platform OANDA.

Benchmark gold futures on New York’s Comex settled up $15.60, or 0.9%, at $1,831.30 an ounce. The session high was $1,844.40. For the week, gold futures showed a 3.2% gain, the highest since the week ended Oct. 29.

The spot price of gold rose by $16.35, or 0.9%, to $1,831.53, after a peak at $1,843.36. For the week, spot gold printed a much higher gain of 3.5%.

Traders and fund managers sometimes decide on the direction for gold by looking at the spot price — which reflects bullion for prompt delivery — versus futures.

“Gold appears poised to hit $1,850 which will be the 200-Day Simple Moving Average,” technical chartist Sunil Kumar Dixit said, referring the spot price. “From there, it could head up to $1,877, which would mark as a 50% Fibonacci retracement level of the move from the $2,075 record high to lows of $1,676.”

After months of anemic prices, gold suddenly broke out on Thursday, playing catch-up to the rally in a horde of commodities from oil to copper, and even coffee, that had reacted to inflationary pressures building since the start of the year.

Friday’s rally in gold came after the Labor Department reported that the U.S. unemployment rate rose to 6.1 percent in April as the country added a sharply lower-than-forecast 266,000 jobs in a pandemic-suppressed market.

The United States lost more than 21 million jobs between March and April 2020, at the height of business lockdowns forced by the coronavirus. More than 8 million of those jobs have not returned, officials say.

Economists had expected as many as 1 million new U.S. jobs for April, building on March's gains of 916,000. That made what the Labor Department reported disappointing to many.

“There's a bit of disbelief around this number,” said economist Adam Button, commenting on a post on ForexLive. “I wonder if this is a game-changer and shifts the conversation towards the Fed's baseline about rates staying very low for a very long time along with only-transitory inflation.”

The Federal Reserve has kept U.S. interest rates at between zero and 0.25% since the outbreak of the coronavirus pandemic last year, with Chairman Jerome Powell arguing that the rise in price pressures in recent months were temporary trends that would abate over time.

Analysts said while the latest U.S. jobs report itself was a damper for inflation, it nevertheless kept up the theme of monetary accommodation by the Fed, which was positive for gold.

“Gold’s best friend is Fed Chair Powell and other doves that remain committed to the idea that temporary inflation won’t persist,” said OANDA’s Moya.

Gold Has Best Week Since October on U.S. Payrolls Shock
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (7)
Bossa Omo
Bossa Omo May 09, 2021 9:41AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Please help us
Bossa Omo
Bossa Omo May 09, 2021 9:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Give me some thing
NLP NLP
NLP1 May 07, 2021 4:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Your article sums up the market nicely. Anemic gold prices suddenly responding to factors that have spurred rallies in other commodities. I I like the term you use - “anemic”. It captures the essence of how gold has reacted recently. The last few sessions have seen spikes but really with the myriad of co-morbidities plaguing the economy, logic would suggest we should be considerably higher by now. It’s a move in the right direction but it still has a ways to, in my opinion.
Mitch Boch
Mitch Boch May 07, 2021 4:34PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold=bitcoin. All what somebody think its worth like art and oil.
Jack Drummond
Jack Drummond May 07, 2021 1:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Well, did I call it wrong- or did I call it wrong? I'm still apprehensive of price makers finding some positive news in the economy :)
Barani Krishnan
Barani Krishnan May 07, 2021 1:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You called it, right Jack. You are always balanced, that's what I like about you, mate! Bests.
CHAD TENDIES
CHAD TENDIES May 07, 2021 1:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold is money
Barani Krishnan
Barani Krishnan May 07, 2021 1:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It is Chad! Bests.
Notvery Goodathis
Peteymcletey May 07, 2021 1:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biden hates America
Barani Krishnan
Barani Krishnan May 07, 2021 1:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Keep your politics out and your focus in on the commodity.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email