Gold continues to recover above $4,100

Gold traded around $4,140 per ounce, up as much as 1.9 percent. Gold rose above the $4,000 support level yesterday, recording its highest increase since August. On Wednesday, Treasury bond yields fell in all maturity brackets, while the dollar lost 0.4 percent of its value following the election results that hit the Trump administration hard. Today, both dollar and bond yields fell further.

While gold's recovery is the biggest rebound yet after months of decline, it is still down more than a fifth of its value since US-Iran tensions broke out in late February. The increase in energy prices caused by this tension led to the tightening of monetary policy.

Analysts, including Sim Moh Siong from Oversea-Chinese Banking, said: "Encouragingly, gold is responding to favorable macroeconomic conditions again. We are cautiously optimistic that gold is starting to find its feet again, but the easing of Fed tightening expectations and the revival in investment demand are still key to sustaining gains."

Investors will be watching the U.S. employment report due on Friday for more clues about the direction of the economy and interest rates. Signs that inflation is under control will give the Fed more leeway in easing monetary policy.