Gold prices rise due to weakened dollar and soft US jobs data, silver jumps 2.4%

livemint.com:

China's gold consumption rose 6% in first quarter this year; what is driving the rally? "The downside that we've seen over the last few weeks might actually be running out of steam, opening (the) door for gold prices to resume their upward trajectory," Daniel Ghali, commodity strategist at TD Securities, was quoted as saying Reuters. On Friday, data revealed that job growth in the U.S. decelerated more than anticipated in April, with the rise in annual wages dropping below 4.0% for the first time in nearly three years.

Although gold is typically regarded as a safeguard against inflation, reduced interest rates diminish the opportunity cost of holding bullion and exert downward pressure on the dollar, the currency in which gold is denominated. On Monday, the U.S. dollar experienced a slight decline, having remained close to its lowest point in approximately a month on Friday, influenced by the employment report.

According to CME's FedWatch Tool, the probability of rate cuts in September surpassed 69% on Monday. Additionally, gold received a boost from continued tensions in the Middle East, with Israel's military action in Rafah introducing an additional element of uncertainty into the market. Back home, gold prices in the national capital rose by ₹230 to reach ₹72,250 per 10 grams on Monday, driven by an increase in the rates of precious metals in the global markets, according to HDFC Securities.