Gold climbs above $4,120 as precious metals extend rebound
Gold prices rebounded above $4,100 an ounce on Monday after stronger-than-expected U.S. employment data triggered a pullback, with investors weighing the prospect of further Federal Reserve tightening following the U.S. midterm elections.
At 23:51 ET (04:51 GMT), spot gold rose 0.8% to $4,123.60 an ounce, while U.S. gold futures gained 0.9% to $4,132.26. Silver advanced 1.6% to $52.7890 an ounce, while platinum climbed 1.2% to $1,557.25. Spot palladium rose 2.4% to $1,048.14, while palladium futures gained 2.3% to $1,045.00. The U.S. dollar Index fell 0.1% to 102.14.
Gold fell 0.4% on Friday and traded around $4,070 an ounce after U.S. data showed employers added 165,000 jobs in October, beating every forecast, while the unemployment rate edged lower.
The stronger labour-market figures reinforced concerns that the Federal Reserve could raise interest rates further to contain inflation. Separate data also showed consumer sentiment unexpectedly improved in early November to a three-month high, adding to evidence of economic resilience.
The metal had previously recovered above the $4,000 threshold following the midterm elections, as Treasury yields and oil prices retreated on expectations that incoming Democrats would push for an end to the Iran conflict.
Investors also anticipated that divided government would constrain further government spending and borrowing, helping ease concerns about the U.S. fiscal outlook. Despite the recovery, gold remains around 20% below its level before the U.S.-Iran conflict erupted in late February.
ANZ analysts described bullion as volatile last week amid an uncertain economic and political environment.
Gold had rallied strongly after the election as falling U.S. Treasury yields and crude prices improved the outlook for the metal, but Friday’s stronger payrolls figures reversed some of those gains by reviving expectations of further Federal Reserve rate increases.
Fed officials will receive another employment report and a full set of inflation figures before their December policy meeting, when markets expect another rate increase amid persistently elevated energy prices.
Traders will now focus on Tuesday’s U.S. consumer price index report for further clues on inflation and the interest-rate outlook.
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