Market Movement

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In a surprise twist, the price of gold surged 1% in response to the latest US jobs data, releasing investors from the grip of apprehension that has prevailed since the Federal Reserve’s (Fed) reactive actions. The US dollar index remained unyielding, opening the market with a 0.2% uptick and lingering near a one-month high, placing a limit on the upward momentum of bullion.

US Jobs Data Impact

On Thursday, the US Labor Department report revealed that initial jobless claims ascended to a seasonally adjusted 224,000 for the week concluded on Jan. 27. Simultaneously, a separate report from Reuters disclosed that US worker productivity had outstripped expectations, growing at a faster pace in the fourth quarter.

Phillip Streible, Chief Market Strategist at Blue Line Futures, likened the state of gold to a “bad hangover” following the Fed’s actions. Nevertheless, he pointed out that a small rally was underway, attributing it to the promising initial claims data. Streible highlighted a contrasting trend, noting a decline of over 1% in other metals such as platinum, copper, and silver, which might impede gold’s prospects of a sustainable recovery.

Looking Ahead

With the US nonfarm payrolls due for release on Friday, investor attention has shifted as they anticipate gaining further insight into the Fed’s interest rate trajectory. Jigar Pandit, head of commodity and currency business at BNP Paribas’ Sharekhan, projected that gold is likely to trade with a neutral to bearish bias, although potential losses could be contained in anticipation of the impending US nonfarm payroll report.

(With files from Reuters)