Gold Jumps Again .. Is a New Uptrend Starting Before the Fed's Decision?
Gold and silver prices surged strongly at the close of trading on Friday, as low levels attracted a new wave of buying that restored the luster to precious metals, while investors await the release of U.S. inflation data to determine the direction of upcoming monetary policy.
After a turbulent session that pushed prices to their lowest levels in a week, gold rose in spot trading by 1% to reach $4966.83 per ounce by 01:27 GMT, following a drop of more than 3% on Thursday when it fell below the $5,000 per ounce level.
U.S. gold futures for April delivery also increased by 0.7% to $4985.40 per ounce, according to Reuters.
Silver was the most aggressive, jumping 5% in spot trading to $78.87 per ounce, after a sharp loss of 11% in Wednesday's session, a move reflecting the white metal's sensitivity to rapid fluctuations in investor appetite.
This recovery came despite ongoing pressures from strong U.S. labor market data, which bolstered bets on keeping interest rates high for a longer period by the Federal Reserve; the data showed that the U.S. economy added 130,000 jobs in January, after revising December's figures down by 48,000 jobs, while the unemployment rate fell to 4.3%.
In an additional indicator of labor market strength, initial jobless claims fell to 227,000 in the week ending February 7.
Meanwhile, the dollar remained largely stable against a basket of major currencies, following mixed signals from recent economic data.
An increase in the U.S. currency typically raises the cost of dollar-priced metals for holders of other currencies, putting pressure on prices.
All eyes are now on the upcoming inflation data later today, which will provide crucial signals regarding the path of U.S. interest rates in the coming months, amid a delicate balance between labor market strength and the risks of continued inflationary pressures.
Other precious metals also recorded notable gains; platinum rose by 1.7% to $2033.15 per ounce, and palladium increased by 1.4% to $1639.99, in moves reflecting a gradual return of risk appetite to the metals markets after the recent sell-off.
