Gold rose on Friday, trimming a weekly loss as the US dollar weakened after disappointing US payrolls data supported the case for more economic stimulus.
The US added half as many jobs as expected last month, and December last year’s figures were revised lower, a US government report showed.
The US dollar fell for the first time in three days, increasing demand for bullion as an alternative asset.
The labor report came after the US Senate voted to adopt a budget blueprint for US President Joe Biden’s US$1.9 trillion COVID-19 relief package.
Gold has slumped this year, with progress on vaccines helping the outlook for a recovery from the COVID-19 pandemic and diminishing the appeal of the metal as a haven.
Investors are weighing that view against the possibility that further stimulus could weaken the US dollar and boost consumer prices, with bullion often used as an inflation hedge.
“Today’s data has reaffirmed the need of another round of stimulus, which is helping the gold price,” Ava Trade chief market analyst Naeem Aslam said. “Moreover, the price of gold was way oversold, and this has provided the perfect catalyst for retracement.”
Earlier gains in US Treasury yields faded, giving an additional spur for precious metals, which do not offer interest.
Jonathan Butler, a strategist at Mitsubishi Corp UK PLC, said that this year “will be a year of two halves: The next several months will be marked by a worsening coronavirus situation and associated negative economic impact globally, offset only by further massive fiscal and monetary stimulus.”
Gold posted a second straight weekly drop, and its 50-day moving average is on the cusp of dropping below its 200-day counterpart, approaching a so-called death cross pattern that can signal further losses.
Spot gold on Friday rose 1 percent to US$1,814.54 an ounce in New York, after dropping to US$1,785 on Thursday, the lowest intraday price since Dec. 1 last year. It is down 2.3 percent this week.
Gold futures for April delivery on the Comex climbed 1.2 percent to settle at US$1,813 an ounce.
Silver for immediate delivery rose 2.1 percent, steadying after recent market turmoil. The metal became a target of a retail-driven short-squeeze attempt, leading to an early week surge followed by a collapse.
Palladium and platinum gained.
Additional reporting by staff writer
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