Gold surpasses $1,970, awaiting payroll data.

Published on Sep 01, 2023 15:25

Gold futures jumped above $1970 an ounce in the electronic trades Friday, marking the second, consecutive weekly gain. The rise was underpinned by growing expectations that the Federal Reserve would refrain from raising interest rates further, amid signs of a cooling US economy.

The uptick in gold prices on Friday was driven by diminished prospects of US interest rate hikes for the remainder of the year. Notably, increased US consumer spending in July, coupled with a slowdown in monthly inflation rates, downward revision of US Q2 GDP growth and a five-month low in private sector hiring during August reinforced expectations that the Federal Reserve would maintain its current interest rates.

Atlanta Fed President Raphael Bostic`s argument against further rate hikes further supported this sentiment, emphasizing the adequacy of existing monetary policy to address inflation. Investors eagerly awaited the forthcoming US monthly jobs report for deeper insights into the labor market and the overall US economic health.

Lower US Treasury yields and a weakening dollar contributed to gold`s appeal for non-US currency holders. The DXY was seen trading near 103.52, down nearly 1 % from its near 3 month peaks. In the meantime, the 10-year US Treasury bond yield continues to move sideways at around 4.1%

MCX bullion futures for October contract is about to touch the psychological mark of 60000 per 10 grams, and was last seen trading at Rs 59495 up Rs 121.