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COMMODITIES: Gold Rises Back Above US$1,800 as the Dollar Weakens

· 02/05/2021 04:15

09:04 AM EST, 02/05/2021 (MT Newswires) -- Gold pushed back above the US$1,800 mark early on Friday after dropping below it a day earlier for the first time since late November as the U.S. dollar weakened.

Gold for April delivery was last seen up US$14.40 to US$1,805.60 per ounce in Comex electronic trade.

The rise came on a weaker U.S. dollar weakened after the country reported a lower than expected rise in jobs in January while its trade deficit narrowed. The ICE dollar index was last seen down 0.21 to 91.32 points.

Still, the price of gold has suffered as the dollar rebounds and bond yields rise even as countries continue to add debt to support their economies during the pandemic. However the speed of the recovery has some expecting a return to higher interest rates should central bank step back from inflationary policies.

"It seems that a significant number of market participants believe that the Fed will withdraw its ultra-expansionary monetary policy noticeably sooner than anticipated. Even numerous comments from the ranks of the Fed, explicitly denying that this is the case, have done nothing to change this," Commerzbank analyst Carsten Fritsch said in a note.

European stock markets were mostly higher, while futures point to a higher open on U.S. exchanges, easing the need for gold to serve as a safe haven.