GOLD HITS THREE-MONTH HIGHS

GOLD PRICES hit a three-month high yesterday after last week’s miss on the US jobs growth numbers kept the dollar under pressure and bolstered expectations that interest rates would remain low for some time.

Spot gold price gained 0.5 percent to $1 840.11 (about R25 843) an ounce by 4.50pm, after touching its highest since February 11 at $1 845.06.

US gold futures gained 0.5 percent to $1 839.90.

“The disappointing US job number ultimately catalysed around algorithmic short-covering,” said TD Securities commodity strategist, Daniel Ghali.

Also supporting the precious metal was the return of discretionary capital flowing into gold alongside strong physical demand from China and India prior to the recent lockdowns, Ghali added.

US nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, pushing the dollar to an over two-month trough, making gold less expensive for holders of other currencies.

The lower-than-expected job numbers came as a speed bump on investors’ hopes of a roaring recovery in the world’s largest economy and tamped down bets on the US Federal Reserve tightening policy earlier than expected.

The US central bank has pledged to keep interest rates low until inflation and employment pick up. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

“What is missing from the recent rise in prices and would be required to revive the rally is the participation of safe-haven seekers,” Julius Baer analyst, Carsten Menke said in a note.

Elsewhere, palladium rose 2 percent to $2 985.44 an ounce after hitting an all-time high last week on supply shortfall worries.

UBS raised its end-June and end-September price forecasts for the metal.