Gold rose on Friday, regaining momentum from Thursday’s nearly one-week low as investors focused on key U.S. inflation data released later in the day for clues about the Federal Reserve’s policy outlook and bargain hunters weighed in.
Spot gold was up 0.7% at $4,951.90 an ounce as of 1158 GMT, but is down 0.1% so far this week. U.S. gold futures for April delivery rose 0.5% to $4,971.70 an ounce.
“The rally in gold prices appears to be driven by push buying by market participants in Asia, where gold demand is particularly strong,” said Hamad Hussein, climate and commodity economist at Capital Economics.
China’s gold market saw strong demand ahead of the Lunar New Year holiday, while gold turned to a discount in India this week for the first time in a month as slowing demand amid volatile prices deterred buyers.
Gold fell about 3% to its lowest level in almost a week on Thursday as strong U.S. jobs data dampened expectations for near-term interest rate cuts from the Federal Reserve. Losses widened further as selling pressure intensified and prices fell below $5,000 per ounce.
Data on Wednesday showed the U.S. added 130,000 jobs in January, compared with analysts’ expectations of 70,000.
But independent analyst Ross Norman said: “This move appears to be independent of market fundamentals and not driven by market fundamentals, and market fundamentals across the (precious metals) complex remain positive.”
Analysts at ANZ on Friday raised their second-quarter gold forecast to $5,800 an ounce from $5,400, noting that gold remains an insurance asset against many uncertainties.
Investors are now looking to consumer price index data released later on Friday to gauge the health of the labor market and the prospects for further interest rate cuts this year. Non-yielding bullion tends to do well in low interest rate environments.
Spot silver rose 2.7% to $77.18 an ounce, rebounding sharply from an 11% drop in the previous session. The forecast was for a weekly decline of 0.8%.
Spot platinum rose 0.3% to $2,008.96 an ounce, and palladium rose 1.1% to $1,633.75. Both metals were set to cut weekly losses.
(Reporting by Pablo Sinha in Bengaluru; Editing by Diti Pujara)
