While the dollar gains 0.1% against its rivals, making gold more expensive for buyers using other currencies.
“The main focus of attention has been the change in sentiment following the jobs report. There were high expectations that (Fed chief) Jerome Powell would take the opportunity to pull the market down a bit, but he didn’t,” he said. David Meger, director of metals trading at High Ridge Futures.
“We continue to see gold prices range-bound. There is quite strong support at $1,850-$1,870. We think dips will continue to be a short-term buying opportunity,” he added.
Powell said Tuesday that interest rates would have to rise more than expected if the US economy remained strong, but he reiterated that he believes that the “disinflation” process is underway.
New York Fed President John Williams told the conference that his expectations for future central bank rate cuts are driven primarily by the need to respond to the likelihood of lower levels of inflation in the future.
Gold is highly sensitive to rising US interest rates, as the opportunity cost of holding non-yielding bullion increases.
Following the strong US jobs report, market players are now awaiting next week’s January inflation figures, which could offer further clues as to the path of the Federal Reserve’s rate hikes.
Rupert Rowling, an analyst at Kinesis Money, noted in a note that “one of the factors that may be keeping the price of gold so sustained is the strength of central bank buying, including those of China, India and Turkey.”
The silver cash up a 0.8% au$s22.36, the platinum advanced a 0.5% au$s978.11, while the palladium went down a 0.5% au$s1,637.55.
Source: Ambito
