Gold gains as US jobs data remain gloom

Gulf Today Report

Gold advanced on Monday as US job data increased hope for more fiscal stimulus outweighing optimism for a coronavirus vaccine.

Spot gold prices rose 0.2% to $1,841.93 per ounce by 0554 GMT, while US gold futures were up 0.2% at $1,844.20.

According to Stephen Innes, chief global market strategist at financial services, "softer jobs growth and tighter social mobility restrictions ostensibly lower the hurdle for a policy response from (US) Congress."

US lawmakers are working towards concluding a new fiscal stimulus of $908 billion.

The size of the package is likely to be discouraging for the gold market, added Innes. 

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Gold serves as a shield against inflation which could happen due to large stimulus.

Gold had limited gain due to Britain preparing to start vaccinating its residents against COVID-19 this week.

In a note by Edward Meir, an analyst at ED&F Man Capital Markets, although vaccine news serves as a disadvantage to the gold, it won’t stop authorities from pursuing easier monetary and fiscal policies. 

Gold has resistance at $1,850 an ounce, with a close above that pivot area setting the scene for a test of the resistance line at $1,920 an ounce, Jeffrey Halley, a senior market analyst at OANDA said in a note.