Gold eyes best week in 6 months on lower dollar, Treasury yields

  • US April jobs data due at 8:30 am EST.
  • Silver eyes best week in three months.
  • Spot gold may test resistance at $1,830/oz.
07 May, 2021

Gold prices rose on Friday after breaching the key $1,800 level in the previous session, boosted by a weaker dollar and lower Treasury yields, while investors awaited US non-farm payrolls data due later in the day.

Spot gold was up 0.3% at $1,819 per ounce by 0959 GMT, after hitting its highest since Feb. 16 earlier in the session. Bullion has gained nearly 3% so far this week, its best week since early Nov. 2020.

US gold futures rose 0.3% to $1,820.70.

"The technical picture has brightened after gold finally broke above $1,800. This could lead to follow-up buying by speculative, technical investors and could also lead to more conviction amongst ETF investors," Commerzbank analyst Carsten Fritsch said.

The dollar index slipped to a one-week low, while benchmark US 10-year Treasury yields hovered close to a two-week low.

Market participants await US monthly jobs report due at 08:30 a.m. EST. Economists expect 978,000 new US jobs in April, according to a Reuters poll.

Data on Thursday showed weekly US jobless claims dropped to a 13-month low.

"The Fed has made pretty clear that it will not react even after strong US data and the monetary policy stands for the time being. So, even a strong US payroll would not have a meaningful negative impact on gold. But, a weaker one would be bullish for gold," Fritsch said.

Spot gold may test a resistance at $1,830 per ounce, a break above which could lead to a gain to $1,847, according to Reuters technical analyst Wang Tao..

Elsewhere, palladium fell 0.5% to $2,931 per ounce, after hitting an all-time high of $3,017.18 earlier this week.

Silver eased 0.1% to $27.27 per ounce, though the metal has climbed more than 5% this week. Platinum slipped 0.4% to $1,247.

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