Investing.com - Gold futures were up sharply on Monday, as sentiment on the precious metal was boosted after gold jewelers in India ended a three-week strike over the weekend and following data showing inflation accelerating at a faster pace than expected.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,643.75 a troy ounce during early European trade, gaining 0.84%.
It earlier rose by as much as 1.05% to trade at a session high of USD1,648.15 a troy ounce.
Gold futures were likely to find support at USD1,606.05 a troy ounce, the low from January 9 and resistance at USD1,685.25, the high from April 2.
Trading volumes were expected to be thin as markets in the U.K. and the euro zone will remain closed due to the Easter holiday.
According to the All India Gems & Jewellery Trade Federation, gold dealers in the country returned to work over the weekend, opening shops on Saturday after remaining closed for 21 days.
The three-week strike came to an end after India’s Finance Minister Pranab Mukherjee pledged to reconsider newly imposed taxes on the precious metal.
“We and all our associated members have decided to call off the strike until May 11 and expect some favorable announcement by the finance minister in Parliament by then,” said Bachhraj Bamalway, chairman of the trade group, according to a Wall Street Journal report.
Most Indian jewelry and gold shops have remained closed since March 18 after the country announced a 4% import duty hike on gold and a 0.3% excise tax on most gold jewelry.
Prices could potentially receive a boost in the coming weeks as one of the nation’s largest Hindu gold-buying festivals of Akshaya Tritiya begins later in April. India is the world’s largest gold consumer.
Meanwhile, official data released earlier showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
Politically sensitive food costs accelerated to 7.5% from February's 6.2%. The rise in Chinese food costs was driven by a 20.5% increase in the price of vegetables.
The precious metal is considered a hedge against inflation risk as gold prices tend to keep in step with consumer price increases.
Gold found further support as disappointment from Friday’s weak payrolls report carried over to Monday’s session.
The U.S. Department of Labor said nonfarm payrolls rose by a meager 120,000 in March, the lowest since December and well below expectations for a 203,000 increase.
It was the first time since November that hiring failed to top the 200,000 level, renewing concerns over the health of the U.S. economy.
The unemployment rate ticked down to 8.2%, the lowest since January 2009, from 8.3% in February. However, the data showed that the decline stemmed entirely from people dropping out of the labor force.
The weaker-than-expected jobs report revived expectations that the Federal Reserve may implement a third round of quantitative easing, which would weaken the dollar and drive gold prices higher.
Elsewhere on the Comex, silver for May delivery eased up 0.15% to trade at USD31.77 a troy ounce, while copper for May delivery fell 0.65% to trade at USD3.773 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,643.75 a troy ounce during early European trade, gaining 0.84%.
It earlier rose by as much as 1.05% to trade at a session high of USD1,648.15 a troy ounce.
Gold futures were likely to find support at USD1,606.05 a troy ounce, the low from January 9 and resistance at USD1,685.25, the high from April 2.
Trading volumes were expected to be thin as markets in the U.K. and the euro zone will remain closed due to the Easter holiday.
According to the All India Gems & Jewellery Trade Federation, gold dealers in the country returned to work over the weekend, opening shops on Saturday after remaining closed for 21 days.
The three-week strike came to an end after India’s Finance Minister Pranab Mukherjee pledged to reconsider newly imposed taxes on the precious metal.
“We and all our associated members have decided to call off the strike until May 11 and expect some favorable announcement by the finance minister in Parliament by then,” said Bachhraj Bamalway, chairman of the trade group, according to a Wall Street Journal report.
Most Indian jewelry and gold shops have remained closed since March 18 after the country announced a 4% import duty hike on gold and a 0.3% excise tax on most gold jewelry.
Prices could potentially receive a boost in the coming weeks as one of the nation’s largest Hindu gold-buying festivals of Akshaya Tritiya begins later in April. India is the world’s largest gold consumer.
Meanwhile, official data released earlier showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
Politically sensitive food costs accelerated to 7.5% from February's 6.2%. The rise in Chinese food costs was driven by a 20.5% increase in the price of vegetables.
The precious metal is considered a hedge against inflation risk as gold prices tend to keep in step with consumer price increases.
Gold found further support as disappointment from Friday’s weak payrolls report carried over to Monday’s session.
The U.S. Department of Labor said nonfarm payrolls rose by a meager 120,000 in March, the lowest since December and well below expectations for a 203,000 increase.
It was the first time since November that hiring failed to top the 200,000 level, renewing concerns over the health of the U.S. economy.
The unemployment rate ticked down to 8.2%, the lowest since January 2009, from 8.3% in February. However, the data showed that the decline stemmed entirely from people dropping out of the labor force.
The weaker-than-expected jobs report revived expectations that the Federal Reserve may implement a third round of quantitative easing, which would weaken the dollar and drive gold prices higher.
Elsewhere on the Comex, silver for May delivery eased up 0.15% to trade at USD31.77 a troy ounce, while copper for May delivery fell 0.65% to trade at USD3.773 a pound.