Gold prices today jump to highest in one month. Here is why

Gold prices in India rose to near one-month high in India when futures on MCX rose 0.2% about ₹51,000 per 10 gram. Silver futures however edged lower by 0.3% to ₹60350 per kg. In global markets, gold had surged nearly 3% on Friday after a sharp pullback in dollar index. However, bullion was down 0.4% at $1,672.99 per ounce in global markets today as the dollar index rose again. Spot silver was today down 1.3% at $20.56, platinum fell 1% to $951.46 and palladium lost 0.5% to $1,871.00.

“Gold gained on Friday reversing the entire week loss and closing the week with solid gains. COMEX Gold gained by 1.93% on weekly closing basis. Gold was under pressure in the first few sessions weighed down by Fed’s hawkish stance and persistent decline in SPDR gold holdings to fresh 31-month lows. However, Fridays fall in US Dollar after mixed mix payrolls report that indicated slowing pace in job additions supported the yellow metal that rose to three weeks high of $1686.4/oz," said Ravindra V.Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd.

Investors will now focus on the U.S. inflation data due later this week. The data is likely to shed some light on Fed's rate-hike move in the upcoming December meet.

"Focus will now turn to the Inflation data from US and China due to be released in the week. Consensus is for a moderation of US CPI to 8% annually. Any print that is more than the expectation might cause traders to increase expectations that the Fed’s aggressive stance would continue and that would be positive for US Dollar and weak for gold and vice versa,” he added.

Bullion is considered an inflation hedge, but rising interest rates dent the non-yielding asset's appeal. A strong dollar makes the greenback-denominated gold costlier for holders of other currencies, thus sapping the demand.

“Gold and silver prices surged on Friday following the US jobs report clarified some of the Federal Reserve's mixed messages, and China signaled a possible easing of its Covid-Zero policy. But investors are advised to exercise caution as the recent previous rallies have been used as selling opportunities,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

“Gold prices gained on Friday evening when the October US jobs report showed the unemployment rate rising to 3.7% despite the higher-than-expected job gains. However, non-farm employment data beat the expectations as 2,61,000 jobs were created last month against expectations of 1,97,000 jobs. The report shows that the labor market is cooling, and that is good news. Also, the upmove in gold was seen after the dollar witnessed its worst day since March 2020 and slipped below the 111 mark amid rebound in the other global currencies.”

According to Rahul Kalantri, “gold has support at $1661-1650, while resistance is at $1684-1691. Silver has support at $20.35-20.10, while resistance is at $20.82-21.05. In INR terms gold has support at ₹50,520-50,350, while resistance is at ₹50,980, 51,140. Silver has support at Rs59,480-58,860, while resistance is at ₹60,980–61,510.” (With Agency Inputs)