Gold futures on the Multi Commodity Exchange (MCX) gained close to 1% on Friday, tracking a recovery in global bullion prices after sharp losses in the previous session.
MCX Gold futures were trading at Rs 1,54,324 per 10 grams, up Rs 1,488 or 0.97%, in early trade.
1. Bargain buying after sharp fall
Globally, spot gold rebounded around 1% to $4,966 per ounce, after dropping more than 3% in the previous session and slipping below the key $5,000 level.
The earlier decline was triggered by stronger-than-expected US jobs data, which reduced expectations of near-term interest rate cuts. With prices falling to near one-week lows, investors stepped in to accumulate at lower levels.
2. Silver rebound supporting sentiment
Silver also rose more than 2% in global markets, indicating a broader recovery in precious metals. The bounce across bullion supported gold prices on MCX.
3. Dollar steady after US data
The US dollar held mostly steady after mixed economic signals. A stronger dollar typically pressures gold, but the absence of fresh dollar strength helped prices stabilise.
Recent data showed US nonfarm payrolls rose by 130,000 in January and the unemployment rate edged down to 4.3%, reinforcing expectations that the Federal Reserve may keep rates elevated for longer. However, investors are now awaiting US inflation data for further direction.
4. Short covering adds momentum
After a sharp technical breakdown in the previous session, short covering and bargain hunting provided additional support to gold.
In summary, gold is up on MCX today mainly due to global bargain buying, recovery in silver, stable dollar movement and short covering, following heavy selling driven by strong US economic data.