BENGALURU: Gold prices held steady on Monday, buoyed by concerns over inflation after US President Joe Biden announced a US$2 trillion-plus jobs plan last week, while a stronger dollar and elevated US Treasury yields limited bullion’s upside.
Spot gold was flat at US$1,728.60 per ounce, as of 1.46am GMT. Gold futures edged up 0.1 per cent to US$1,729.50 per ounce, report agencies.The US economy created the most jobs in seven months in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.
Shorter-dated US Treasury yields held near 14-month peak, while the dollar was poised to extend gains against major currencies on Monday after the US Labor Department reported stronger-than-forecast jobs growth in March.
Gold is seen as a hedge against rising inflation, but firmer Treasury yields, which translate into a higher opportunity cost for holding bullion, have challenged that status.
Despite the strong numbers the data will not alter the Federal Reserve’s stance on monetary policy, Steven Ricchiuto, US chief economist at Mizuho Securities USA in New York said.
President Biden’s US$2 trillion infrastructure plan includes initiatives that are widely popular, according to a Reuters/Ipsos poll, but US public support declines when the initiatives are packed into a Democratic bill and sold as a Biden-backed plan.
However, new Covid-19 restrictions in France will impact economic growth this year but it is too early to say by how much, Finance Minister Bruno Le Maire said on Friday. Japan’s services sector activity fell in March, a private survey showed, but taking some shine off the precious metal were signs that the pace of the downturn was the slowest since January 2020.