By Barani Krishnan
Investing.com – Gold returned to above $1,800 an ounce on Friday after tumbling beneath the key support level a day ago, but the yellow metal still finished the week down some 2% due setbacks dealt by the dollar and surging U.S. bond yields.
“Gold is trying to hold the $1,800 line and that could be the case if the dollar rebound is over,” said Ed Moya, senior market strategist at online broker OANDA. But he also warns that the “technical selling that is building for gold is significant and could trigger a drop towards the $1,750 level.”
Benchmark gold futures for on New York’s Comex settled up $21.80, or 1.2%, at $1,813.05. It had tumbled to as low as $1,784.60 on Thursday after a third straight weekly drop in U.S. jobless claims created the impression that the labor market in the world’s largest economy may be putting in a modest recovery. That theory sparked a rally in the and the benchmark
Friday’s rebound in the yellow metal also came on the back of U.S. employment data, this time for all of last month. Despite the climb, April gold still finished the week about $37, or 2%, lower.
For January, the United States added 49,000 jobs — just 1,000 less than forecast by economists. But the unemployment remained at a troubling 6.3% despite a drop of 0.4 percentage points. That reversed some of Thursday’s pop in the dollar, bringing some buyers back to gold.
“XAU/USD looks vulnerable despite reclaiming $1,800 on Friday,” Eren Sengezer said, using the symbol for , in a post on FXStreet.
Gold prices have foundered since hitting record highs of nearly $2,090 an ounce in early August and suffered a deeper setback from November onwards as vaccine breakthroughs for the Covid-19 suggested rapid economic recovery from earlier lockdowns.
That economic rebound has barely materialized due to a new spike in infections and deaths from the virus and slower-than-anticipated vaccine rollouts. But that hasn’t stopped currency and debt traders from continuing to anticipate faster-than-anticipated GDP growth and tapering of stimulus despite the Federal Reserve repeatedly saying neither will likely be as quick as thought.
Gold has also been suppressed on signs that President Joe Biden and Democrats backing him might have trouble passing a $1.9 trillion stimulus in Congress against the objections of rival Republicans.
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