Gold Holds Gains as Investors Assess Pace of Stimulus After Data 

Gold held the biggest one-day advance in more than three weeks as U.S. jobs data that trailed analysts estimates damped speculation that the Federal Reserve will step up the pace of stimulus reduction.

Bullion for immediate delivery traded at $1,302.22 an ounce at 11:25 a.m. in Singapore from $1,303.50 on April 4, when the metal climbed 1.3 percent, the most since March 12, according to Bloomberg generic pricing. Gold is up 8.4 percent this year, rallying from the worst annual decline since 1981, as Russia’s takeover of Crimea boosted haven demand.

The U.S. economy added 192,000 jobs last month compared with a median forecast for 200,000 in a Bloomberg News survey of economists ahead of the April 4 data. Last week, Fed Chair Janet Yellen said that slack in labor markets showed accommodative policies will still be needed for some time, while Fed Bank of St. Louis President James Bullard signaled slowing inflation might prompt policy makers to suspend tapering.

“While the recent U.S. payroll data was just below forecasts, we believe the Federal Reserve will continue to scale back stimulus,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “With safe-haven demand risks weakening and the U.S. economy seemingly on track again, we anticipate the gold price to begin tracking lower.”

Yellen sparked gold’s decline to $1,277.79 on April 1, the lowest since Feb. 11, after saying that the central bank may end the bond-buying program this fall and raise borrowing costs six months after that.

Fed Minutes

The Fed, which next meets at the end of the month, cut monthly bond-buying by $10 billion at each of the past three gatherings, leaving purchases at $55 billion. The minutes from the March 18-19 meeting are due for release on April 9.

Gold for June delivery traded at $1,302.80 an ounce on the Comex in New York from $1,303.50 on April 4, when futures rose 1.5 percent. Assets in the SPDR Gold Trust declined to 809.18 metric tons on April 4, the least since March 7.

Silver for immediate delivery fell as much as 0.5 percent to $19.8633 an ounce and traded at $19.9195. Platinum lost 0.3 percent to $1,446.50 an ounce, halting a six-day winning run that was the longest since February. Palladium increased 0.1 percent to $790.98 an ounce, set for a seventh day of gains, the longest streak in a month.

(By Glenys Sim)

Source: bloomberg

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