Gold futures surge $30 as weak dollar and bond yields support markets

Comex gold contract Delivered in Dec. Up $30 to close at $1,702.00/oz.

A weakening dollar will increase the attractiveness of gold. by making gold contracts cheaper for holders of other currencies The fall in US government bond yields. It will reduce the opportunity cost of holding gold. Because gold is an asset that does not return in the form of interest.

Investors have eased concerns about faster Federal Reserve interest rate hikes after the US manufacturing index was the lowest in more than two years.

The Institute for Supply Management (ISM) said its manufacturing index fell to 50.9 in September, the lowest level in more than two years since May 2020. It was below analysts’ forecast of 52.3 from 52.8 in August.

The manufacturing index was hit by a contraction in new orders. This was the third contraction this year, while employment contracted for the fourth time.

Investors will be keeping an eye on the release of non-farm payroll numbers for September on Friday.

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