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As markets watch US jobs data, gold rises due to a softer dollar and yields

On Monday, gold held near a seven-week high due to a weaker dollar and lower U.S. Yields in advance of important jobs data. Silver rose but fell short of Friday's record.

Spot gold increased 1%, to $4344.40 per ounce at 0656 GMT. Bullion reached its highest level since October 21 last Friday.

U.S. Gold Futures rose 1.1% to $4.377.40 per ounce.

The dollar was hovering?near the two-month low reached last week. This made bullion attractive to overseas buyers. Meanwhile, benchmark 10-year U.S. Treasury yields dipped.

Kelvin Wong, senior market analyst at OANDA, said that "gold is likely to continue being well-bid into U.S. Non-Farm Payrolls" as evidence of a?labour shortage would cap front-end yields and keep the dollar weak. This will support a push towards $4,380-4,440 following a strong rebound from a?$4,243 support zone."

The markets are still focused on the Fed's outlook for policy after the U.S. central banks delivered a 25 basis-point rate reduction last week, in a split decision. They also signaled a possible pause because inflation is sticky and labour market outlooks are uncertain.

Two Fed officials dissented, saying inflation was too high to justify a more lenient policy. Investors currently expect two rate cuts in the next year, and this week's U.S. employment report is seen as an important test.

Gold and other non-yielding investments benefit from a low interest rate environment.

ANZ stated in a report that India's decision to allow pension funds the opportunity to invest in ETFs for gold and silver could boost institutional participation.

We believe that such regulations can increase investor confidence and improve sentiment, resulting in higher allocations of assets across portfolios.

Spot silver increased 2% to $63.23 an ounce. The price of silver reached a record high on Friday at $64.65. However, it closed sharply lower.

Despite a rally that has risen more than 115% this year, ANZ warned of downside risks. They cited the possibility of a U.S. exemption from tariffs that could ease supply and stretched valuations compared to gold, which may lead to fund rotation.

Palladium prices rose 2.9%, to $1.531.28, while spot platinum fell 0.4%, to $1.738.23 per ounce.

(source: Reuters)