Gold rises on technical trading and weaker dollar

Gold rises

The prices of gold went up on Monday, its third gain in a row, on technical buying and a weaker dollar due to the U.S. jobs data released on Friday last weak subdued expectations for near-term interest rate hikes.

Spot gold went up 0.3 percent to $1,222.95 per ounce.

U.S. gold futures rose 0.4 percent to $1,222.45 per ounce.

As construction firms and retailers increased hiring, the U.S. job growth went up more than expected in January, but wages hardly even rose, handing the administration under President Donald Trump both a head start and a challenge as it seeks to boost the economy.

The dollar index, which tracks the greenback against other major currencies was down 0.1 percent at 99.736.

Brian Lan, managing director at gold dealer GoldSilver Central in Singapore, said that ” Gold is pointing to push higher from all fronts on charts.”

He added that gold may test $1,230 per ounce.

According to Wang Tao, a technical analyst from Reuters, Spot gold may rise towards resistance at $1,249 per ounce as it was able to stand above resistance at $1,219.

Two rate hikes from the Fed this year is what Wall Street’s top banks expect and see only a modest risk to the U.S. central bank being pressed into a more aggressive pace of monetary policy tightening.

Lan said “It's unlikely there will be a rate hike in March as there is too much political unrest in the United States. At least in the first half of the year, gold should do quite well.”

Gild is very sensitive to the increasing U.S. rates, which increases the opportunity cost of holding non-yielding bullion while boosting the greenback, in which it is priced.

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