Gold Up as Central Banks Regain Appetite for Gold Buying
Gold was up on Monday morning in Asia after some central banks began increasing their gold holdings. Investors also await further U.S. economic data for further clues on the central bank’s monetary policy.
Gold Futures were up 0.24% to $1,787.55 by 10:39 PM ET (2:39 AM GMT).
On the demand side, central banks including Serbia, Thailand, and Ghana are increasing their gold holdings due to signs of accelerating inflation.
“Long term, gold is the most significant guardian and guarantor of protection against inflationary and other forms of financial risks,” said the National Bank of Serbia.
In the U.S., data released on Friday said that the nonfarm payrolls increased by 850,000 in June thanks to rising wages and more incentives. It was higher than 700,000 figure in forecasts prepared by investing.com.
Investors now focus on other economic data and the U.S. Federal Reserve’s next move for further clues on U.S. economic recovery from COVID-19 amid concerns over persistent inflation.
In Asia, the world’s third-largest economy Japan’s services sector activity shrank for the 17th consecutive month in June as COVID-19 hurt demand at home and abroad.
Meanwhile, data released earlier in the day said that China’s Caixin services purchasing managers index (PMI) in June was 50.3, below May’s 55.1 figure.
Gold in India was sold at a premium for the first time in the previous week in more than two months. Demand increased after the second-largest consumer of gold slightly eased its COVID-19 curbs.
In other precious metals, silver edged down 0.2%, palladium gained 0.3% while platinum slid 0.3%.