Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinWith futures markets closed Good Friday, spot gold edged up 0.2% to $1,736.50 after strong US payrolls data and massive new fiscal spending proposals stoked expectations for higher inflation, lifting demand for long-term stores of value.

The US economy added 916,000 jobs in March, blowing by forecasts of around 650,000 and dropping the unemployment rate to 6%. It was the biggest monthly increase since August, with all industries hiring, as many more Americans were vaccinated and businesses reopened after pandemic closures.

With the Fed signaling its intention to keep easy money policies in place and the Biden administration's new $2.3 trillion infrastructure and jobs plan unveiled this week, some economists are concerned that the economy may overheat and drive prices sharply higher for goods and services.

While gold has been pressured recently by rising Treasury yields, it remains supported by negative real yields and rising demand for inflation hedges.

In addition, as Wells Fargo's head of real asset strategy, John LaForge, said today in a note to clients, the global supply of gold has flipped from surplus to deficit in the past three years. He sees gold "on the eve of a new commodity bull super-cycle" that could push the metal above $2,100 this year.

Also underpinning the global gold market, India's gold imports surged by 471% to a record 160 tonnes in March as bargain-hunters rushed to take advantage of the recent price correction. India is the world's second-largest gold buyer behind China.