COMEX gold, silver extend rally ahead of key US jobs data

Gold prices edged higher on Friday (Mya 8) and remained on track for a weekly gain as easing inflation concerns, a softer US dollar and hopes of a potential US-Iran diplomatic breakthrough supported bullion demand, while investors awaited key US jobs data for further cues on interest rates.

COMEX gold was trading at $4,722.20 per ounce, up 0.24%, while COMEX silver rose 0.44% to $80.535 in early trade on Friday (May 8).

Spot gold has gained nearly 2% so far this week.

Bullion prices continued to draw support from improving sentiment around ongoing US-Iran negotiations, despite renewed hostilities between the two countries on Thursday (May 7). The exchange of fire marked the biggest challenge to the month-long ceasefire, although both sides later indicated they did not want the conflict to escalate further.

Markets interpreted reports around a possible reopening arrangement for the Strait of Hormuz as a sign that diplomatic engagement was continuing, helping ease fears of prolonged supply disruptions and inflationary pressures. The decline in crude oil prices

and bond yields further strengthened sentiment for precious metals.

Kaynat Chainwala, AVP Commodity Research at Kotak Securities, said COMEX gold extended gains as optimism over a potential US-Iran understanding improved the outlook for bullion.

“The report accelerated the drop in oil prices and bond yields as hopes of a US-Iran deal eased inflation expectations, while the dollar also retreated to pre-war levels. If Friday’s (May 8's) official jobs report confirms signs of a cooling labour market, expectations for Federal Reserve rate cuts could strengthen further, providing an additional boost to non-yielding assets like gold and silver,” she said.

A weaker dollar also supported precious metals, making gold cheaper for holders of other currencies.

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said gold remained positive amid improving global sentiment and softer commodity prices.

“Markets are anticipating a constructive outcome in the coming days,” he said.

He added that traders remained cautious ahead of the US non-farm payrolls and unemployment data, which could influence expectations around future Federal Reserve policy moves.

On the policy front, Federal Reserve Bank of Cleveland President Beth Hammack said the US central bank may keep interest rates steady for an extended period amid persistent uncertainty.

Meanwhile, official data showed China’s central bank added gold to its reserves for the 18th consecutive month in April, highlighting continued central bank demand for bullion globally.

-With Reuters inputs