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Gold futures extended their rise early Monday, after bullion notched the steepest weekly gain since mid November, following a stronger-than-expected monthly rise in the U.S. job market.
April gold
GCJ22,
GC00,
was trading $6.50, or 0.4%, to trade at $1,814.30 an ounce, following a weekly gain of 1.2%, which would was the sharpest such advance since a 2.85% advance in the week ended Nov. 12.
“Gold has started the week on the front foot by making fresh gains after climbing above and successfully holding above the psychologically important threshold of $1,800 an ounce,” wrote Rupert Rowling, market analyst at Kinesis Money, in a Monday research note.
The U.S. added 467,000 jobs in January, with economists polled by The Wall Street Journal forecasting 150,000 new jobs and some predicting job losses on the month due to the impact of omicron, the variant of the coronavirus that causes COVID-19.
The positive results, however, are expected to support a faster pace of interest-rate increases by the Federal Reserve, with the market pricing in as many as four rate hikes this year to benchmark federal funds rates, which currently stand at a range between 0% and 0.25%.
“While today is set to be a quieter day of trading, gold’s medium-term direction will be governed by how quickly the Federal Reserve decides to implement the more hawkish strategy officials spoke more explicitly about last week,” Rowling wrote.
Any increases will likely strengthen the U.S. dollar and place dollar-priced gold under pressure.
The dollar
DXY,
was flat at around 95.47, little changed, while the 10-year Treasury note yield
TMUBMUSD10Y,
was edging up at 1.93%. A stronger dollar can undercut appetite for buck-priced bullion among overseas buyers while rising yields can lift the opportunity costs of owning nonyielding assets over government debt.
Concerns about pricing pressures will add to interest in a report on consumer prices due Thursday, the consumer-price index.
Meanwhile, March silver
SIH22,
was trading 38 cents, or 1.7%, higher at $22.86 an ounce, after gold’s sister metal put in a 0.8% weekly advance on Friday.
