Gold prices declined today (August 8, 2022) following robust US jobs data announced last week lifted the prospect of aggressive rate hike bet by the US central bank. The higher interest rate in the economy weigh in on the yellow metal as the opportunity cost of holding non-interest yielding bullion increases.
At the time of writing this copy at around 12:26 pm (IST), spot gold internationally was down by a tad 0.09% at $1774.9 per ounce. In the previous session, it fell by 1%. US gold futures also softened to $1790.55, with a drop of 0.03%.
"Stunning U.S. payrolls report pushed back against talk of recession and lifted the dollar index to its highest since July 28, making gold more expensive for other currency holders", said the Reuters report.
"Gold off to a tranquil start as the market is still digesting the implication of the bumper U.S. jobs reports and to what extent it will influence the Fed," Stephen Innes, managing partner at SPI Asset Management is cited as saying in the report.
"I think the July surge in non-farm payroll employment raises the odds of a third 75 basis-point rate hike in September, which should be negative for gold", he added.
Back on the MCX, October gold futures are close to notch Rs. 52,000 per 10 gm levels. At day's high, gold prices gained up to Rs. 51,965 per 10 gm. Last it traded with gains of 0.12% or Rs. 61 at Rs. 51,935 per 10 gm.
On the trading strategy in the yellow metal, Tapan Patel, Senior Analyst (Commodities), HDFC Securities said, "We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,760 and resistance at $1,786 per ounce. MCX Gold October support lies at Rs. 51,500 and resistance at Rs. 52,100 per 10 grams".