At the beginning of the new trading week, the price of gold fell to the level of $1,823 per ounce.
On Friday, the quotes rose to a seven-week high after the release of a weaker-than-expected employment report. The increase in the number of non-agricultural jobs in the US by 223,000 was the smallest increase in seven months, easing fears that the Fed will begin to reduce asset purchases in the very near future. Despite the short-term increase in gold prices, a weak labor market is unlikely to lead to a steady increase in inflation, which positively affects the demand for the precious metal. According to some valuation models, gold is now undervalued by about $ 150. To realize the full potential, an increase in average wages is necessary. Gold imports to India in August almost doubled compared to last year to the highest level in five months due to high demand. Last month, India imported 121 tons of gold, compared with 63 tons a year earlier. Low prices for the precious metal prompted jewelers to increase purchases before the holidays. An increase in imports by the world's second-largest consumer of bullion could support benchmark gold prices, which have adjusted by almost 12% from a historic high of $2,072 in August 2020. An increase in supplies could increase India's trade deficit and put pressure on the rupee. Retail demand in August was also good, as the number of cases of coronavirus decreased, and people began to actively buy jewelry again. In September, gold imports to the country may exceed 80 tons from 12 tons a year earlier, if prices remain stable on the eve of the festivals.
The forecast expects the gold price to strengthen to the levels of 1825, 1830 and 1840 dollars per ounce.