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Growing Tapering Signs Put Gold Bugs Under Pressure.

Growing Tapering Signs Put Gold Bugs Under Pressure

Despite disappointing data in the latest U.S. jobs report, gold fell at the start of the week, with the U.S. Federal Reserve expected to start asset tapering on schedule.

Gold futures traded at $1,754 an ounce on Monday morning, after hitting a two-week high after the U.S jobs report released on Friday but retracing gains during the session.

Yellow metal prices are currently consolidating above $1,745 (October 6 low).

Under this level, the next support would be the September 29 and 30 low of $1,720, which may expose the 2021 low of $1,6090 an ounce.

On Friday, the 10-year Treasury yields hit their highest level since early June 2021, as the dollar, which normally moves inversely to gold, increased on Monday.

Last Friday, the Bureau of Labor Statistics reported 194,000 jobs and a 4.8% unemployment rate in the world’s largest economy.

Even though the nonfarm payrolls figure was much lower than the 500,000 predicted by experts, it is widely expected that the Fed will begin asset tapering in November 2021 as COVID-19 cases in the country begin to decline.

Mary Daly, head of the San Francisco Fed, said that although the job market will continue to be impacted by COVID-19, it is too soon to call it stagnant.

For the first time in over two months, physical gold rates in India have flipped to a discount during the past week, as rising local prices curb demand. Taking advantage of markets that reopened after the Golden Week holiday, China’s buying was expected to pick up.

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