IV:Gold edges higher in rangebound trade; Fed stimulus in focus
Investing.com - Gold futures edged higher in rangebound trade on Monday, as investors continued to assess the need for further easing from the Federal Reserve following last week’s stronger-than-expected U.S. jobs report.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,471.55 a troy ounce during European morning hours, up 0.5% on the day.
Comex gold prices held in a range between USD1,467.85 a troy ounce, the session low and a daily high of USD1,478.15 a troy ounce. Gold prices rose to a session high of USD1,487.15 a troy ounce on Friday, the strongest level since April 15.
Gold prices were likely to find support at USD1,439.75 a troy ounce, the low from April 25 and near-term resistance at USD1,487.15, Friday’s high.
The U.S. Department of Labor said Friday that the economy added 165,000 jobs in April, above expectations for an increase of 145,000, while job increases for the previous month were revised up to 138,000.
The U.S. unemployment rate unexpectedly fell to a four-month low of 7.5% from 7.6% in March.
The Federal Reserve last week recommitted to its USD85 billion a month asset purchase program and indicated that it could increase or decrease the monthly amount, depending on the outlook for inflation and employment.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.
From a technical standpoint, the precious metal is expected to meet strong resistance at the USD1,490-level.
Gold prices have recently been recovering after a massive selloff in April. Comex gold fell to a 27-month low of USD1,322.25 an ounce on April 16.
Since then, the yellow metal has climbed nearly 10% as investors returned to the market to seek cheap valuations. Year to date, they’re still down about 13%
Elsewhere on the Comex, silver for July delivery eased up 0.35% to trade at USD24.09 a troy ounce, while copper for July delivery dipped 0.35% to trade at USD3.303 a pound.
