Gold Bounces Back After Solid US Jobs Data

Gold futures closed higher in the domestic market on Monday bouncing back after a solid U.S. jobs report issued late last week contributed to a drop in prices to their lowest level in about four months. The U.S. nonfarm-payrolls data had brought negative news for gold traders as the number from the outset looked acceptable.

The U.S. Federal Reserve is contemplating its efforts to normalize policy. In a Friday’s report, the central bank forecasted a gradual increase in interest rates and the imminent wind down of its balance sheet. The European Central Bank, meanwhile, has been signaling that it is getting ready to wind down its stimulus efforts after years of aggressive bond buying.

The collective shift in sentiment by central bankers has rocked bonds, yanking prices lower and sending global bond yields surging. That’s proven to be a negative factor for gold, which doesn’t offer a yield.

At the MCX, gold futures for August 2017 contract ended at Rs 27789 per 10 grams, up by 0.02 per cent, after opening at Rs 27,732 against a previous close of Rs 27,784. It touched the intra-day high of Rs 27,820.

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Suhani Verma

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