Gold surged up on Monday, February 5, after posting its biggest one-day loss in two months in the previous session as a softer tone to the dollar took some pressure off the metal.
Gold dropped 1.2 percent on Friday after stronger than expected U.S. payrolls data shored up expectations that a pick-up in inflation will spur further U.S. interest rate hikes this year, boosting the U.S. currency, in which it is priced.
Spot gold was at $1,336.15 an ounce at 1030 GMT, up 0.2 percent but well below late-January’s 17-month high of $1,366.07. U.S. gold futures for April delivery werem$2.10 an ounce higher at $1,339.40.
“This morning the greenback is weakening again, and this is supporting the recovery of the (gold) price after Friday’s fall, which was mostly due to growing expectations for a hawkish Fed in 2018,” ActivTrades’ chief analyst Carlo Alberto de Casa said.
While gold is often considered an inflation hedge, Julius Baer said in a note, the fact that price pressures were being driven by confidence about growth rather than dollar weakness and rising oil prices meant it was failing to react positively.
Futures markets reacted after the jobs data by pricing in the risk of three, or even more, rate rises from the
Federal Reserve this year.
Meanwhile, hedge funds and money managers raised their net long position in COMEX gold contracts in the week to Jan. 30 to their highest level since late-September, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
Spot silver was up 1.1 percent at $16.80 an ounce, having earlier matched the previous session’s five-week low of $16.54. The metal fell 3.7 percent on Friday in its biggest one-day decline since Dec. 2016.
Platinum was up 0.7 percent at $992.90 an ounce, while palladium , which alone among the major precious
metals posted gains on Friday, was down 1.1 percent at $1,035.50 an ounce.
