Gold edges higher on US stimulus hope
- 08 Feb 2021
Gulf Today Report
Gold prices gained on Monday as US jobs data boosted hope for US stimulus.
Spot gold was up 0.1% at $1,813.96 per ounce by 05:52 GMT while US gold futures rose 0.1% to $1,815.50.
Howie Lee, an economist at OCBC Bank said: "markets are justifiably spooked by the very low non-farm payrolls on Friday and that has raised economic uncertainty as well as high expectations for more fiscal stimulus from the US, gold has responded to that."
A weak US Jobs data stoked concerns of a slow economic recovery, thereby making the dollar fall.
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However, the gains in benchmark 10-year Treasury yields capped gold’s gain.
Yields are "probably the biggest single headwind" for gold, Nicholas Frappell, global general manager at ABC Bullion said, adding gold remains vulnerable to the dollar, which has more room to extend its recent gains.
Investors are keeping an eye on the progress of the $1.9 trillion COVID-19 US relief package.
Gold serves as a shield against inflation and currency debasement, therefore, it is can rise to $1,900 levels later in 2021 as focus shifts to inflation expectations, OCBC’s Lee said.
Among other precious metals, spot silver gained 0.6% to $26.99 an ounce, platinum rose 0.9% to $1,133.75 and palladium added 0.3% to $2,343.59.