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Gold gained in the first week of May when the traders received positive data from the US, and the Fed remained firm on keeping the rates unchanged.
The employment data was more positive than expected, and gold’s resilience showed it could withstand the recent selling pressures.
There were over 263,000 new jobs in the last month in the US, but the wage growth was not assertive where the low unemployment rate was conceived, mainly because many had left the labour market.
The working hours dropped, and the unemployment reports attributed to the service sector's poor reports. Overall, the precious metal was supported by the exhausting fiscal stimulus and weaker data from the US.
One of the key figures expected to come out in the month is US inflation data, where the Fed Chairman said the current circumstances are of low inflation. The Fed suspects the current situation to be a transitory factor responsible for holding inflation. Low inflation means the Fed may cut rates.
Gold remained at $1,280.30/oz in the first week of May, where investors expect the rates to gain to $3,000-$4,000 an ounce in the future. In India, Akshay Tritiya, in the first week of May 2019, is celebrated as the day when people buy the metal as it is auspicious to buy valuable items on this day when the value grows multifold.
The yellow metal is historically associated with auspiciousness and is a rare metal used as a financial unit.
It does not lose quality or structure or decay with time. It can be bought in several shapes and made into several different items.
The yellow metal can be bought as a commodity where the prices bounce regularly. Events like recession, military conflicts, natural disasters, structural issues with financial institutions, international trade, economic issues, and other geopolitical factors negatively influencing markets support such funds.
The buyers must look for the best price with the metal exchanges and check the policies to buy or sell.
The dealers may have different policies for buying back the metal, where they may charge a premium for buying back. In such conditions, one can buy coins to get physical units.
Creditability can be assured through reliable organizations, and one should check for the warning signs, where the low prices offered in physical gold should be inspected for quality.
One can buy ETFs, which provide safe alternative ways where the fees are minimal and there is plenty of liquidity in such funds.
One can buy such a commodity by investing in mining stocks. Commodity futures can provide contracts to trade, but the traders require professional skills to trade in it successfully.
Overall, many benefits of the metal offer a hedge against geopolitical instability. It holds a store of value offers diversification and provides protection against falling exchange rates and inflation.
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