Gold prices rebounded on Friday at Asia’s trading session. This was as the recent retreat in the value of the U.S. dollar and high sell-offs recorded in global equities lifted demand for the safe-haven metal.
gold future at the time this report was drafted gained 0.27% to $1,943.
Asian equities on Friday recorded significant sell-offs after Wall Street’s benchmarks posted their biggest one-day declines since June.
A top U.S Federal Reserve official, yesterday called on the U.S Congress to deliver more fiscal support and signaled that U.S. monetary policy could be more accomodating, meaning very low-interest rates would be kept for a longer period of time in order to stabilize the world’s largest economic recovery to its pre-pandemic strength.
What you must know about gold: The precious metal tends to usually rise in value on expectations of lower U.S interest rates, which reduces the opportunity cost of holding non-yielding bullion. Also, it usually rallies up, when the U.S dollar shows weakness.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, spoke on the all-important macro that traders are presently awaiting on—the US non-farm payroll.
“The US non-farm payroll (NFP) data for August will be necessary. If the number disappoints, as the ADP number on Wednesday did, gold could rally.
Longer-term support remains from the inflation targeting, but we need inflation to pick up, and as you can see by the sell-off in commodities, that you can keep.