By Barani Krishnan
Fintech Zoom – Gold
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.
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 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.
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 , 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.