Commodity Market: Gold extends rebound from a three-week low as US Dollar eases from a 21-week peak

Spot Gold extended gains from the previous trading day on Thursday, while rebounding from an over three-week low, as the US Dollar and US bond yields eased from recent highs. A bleak US jobless claims report also supported demand for the yellow metal.

The US Dollar eased from highs not seen since early November along with US Treasury yields, while making Gold more affordable for international investors holding other currencies.

Additional support for the precious metal came after a government report showed on Thursday that the number of Americans filing for unemployment benefits for the first time had increased unexpectedly last week.

The $2 trillion-plus job plan, announced by US President Joe Biden on Wednesday, also provided support to Gold prices, as it brought about inflation concerns. Gold is usually considered as a hedge against inflation.

In terms of physical demand, reports stated that India’s gold imports had risen to a record 160 tonnes in March.

Most markets will remain closed for Good Friday on April 2nd.

Spot Gold surged 1.31% on Thursday to close at $1,729.88 per troy ounce, while moving within a daily range of $1,705.87-$1,730.64 per troy ounce. On March 31st it slipped as low as $1,677.95 per troy ounce, which has been its weakest price level since March 8th ($1,676.87 per troy ounce). The commodity retreated 1.55% in March, while marking its third consecutive month of decline.

Gold futures for delivery in June went up 0.70% on Thursday to close at $1,728.30 per troy ounce.

“This is an upward correction in a structured bear market,” Phillip Streible, chief market strategist at Blue Line Futures, was quoted as saying by Reuters.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.05% to 92.880 on Friday, while easing from Wednesday’s 21-week high of 93.437.

In terms of macroeconomic data, today market players will be paying attention to the March report on US Non-Farm Payrolls, Unemployment Rate and Average Hourly Earnings due out at 12:30 GMT.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of April 2nd, investors saw a 98.3% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on April 27th-28th, or unchanged compared to April 1st.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,700.24
R1 – $1,722.52
R2 – $1,737.57
R3 – $1,759.85
R4 – $1,782.14

S1 – $1,685.19
S2 – $1,662.91
S3 – $1,647.86
S4 – $1,632.82