Gold rose more than 1% on Friday, rebounding from Thursday’s near one-week low, as bargain-hunters stepped in, with investors keeping an eye on key U.S. inflation data due later in the day for cues on the Federal Reserve’s policy outlook.
Spot gold was up 1% at $4,969.85 per ounce as of 1000 GMT, and has gained 0.2% so far this week. U.S. gold futures for April delivery rose 0.9% to $4,990.30 per ounce.
“Dip-buying by market participants in Asia, where demand for gold has been particularly strong, appears to be driving the rebound in gold prices,” said Hamad Hussain, a climate and commodities economist at Capital Economics.
Chinese gold market
The Chinese gold market saw robust demand as it heads into the Lunar New Year holiday, while gold flipped to a discount in India this week for the first time in a month on subdued demand as volatile prices deterred buying. Gold dropped about 3% on Thursday, falling to its lowest in nearly a week, as strong U.S. jobs data dampened hopes of near-term Fed rate cuts.
A break below $5,000 per ounce deepened losses, as selling pressure intensified. Data on Wednesday showed the United States added 130,000 jobs in January, compared to analysts’ estimates of 70,000.
However, “the moves seem to be irrespective of what the market fundamentals are, not because of them, and the market fundamentals across the (precious metals) complex remain positive,” said independent analyst Ross Norman.
Analysts at ANZ on Friday raised their gold forecasts to $5,800/oz for the second quarter, up from $5,400, noting that the metal remains an insurance asset against a plethora of uncertainties.
Investors are now looking at CPI data
Investors are now looking out for the Consumer Price Index data, due later on Friday, to gauge the health of the labor market and the prospects of further rate cuts this year. Non-yielding bullion tends to do well in low-interest-rate environments.
Spot silver climbed 3.9% to $78.11 per ounce, rebounding from an 11% drop in the previous session. It was on track for a weekly gain of 0.8%.
Spot platinum rose 1.4% to $2,027.60 per ounce and palladium was up 1.7% at $1,644.24. Both metals were set to notch weekly losses. (Reporting by Pablo Sinha in Bengaluru; Editing by Diti Pujara)