Gold Steady Below $1270 on Weak Jobs Data
Gold extended gains to a second session on Monday, boosted by a disappointing U.S. non-farm payrolls report that eased concerns about an early interest rate increase, with investors also eyeing developments in the Ukraine crisis.
Spot gold had ticked up 0.2 percent to $1,271.09 an ounce by 0349 GMT, following a 0.6 percent gain on Friday after data showed U.S. employers hired the fewest number of workers in eight months in August.
The metal also remained well-bid as Asian shares edged down on Monday, taking little comfort from mixed Chinese trade data, but volumes were thin as markets in China, the top buyer of bullion, were closed for a holiday.
“Gold found some support as the case for a more cautious Fed was strengthened following slower U.S. jobs growth in August,” said Victor Thianpiriya, analyst at ANZ.
Weak data on the strength of the economy could prompt the U.S. Federal Reserve to be cautious about raising interest rates. An increase in rates would dull the demand for non-interest yielding assets such as gold.
Other traders said developments in Ukraine were being watched to see if the ceasefire agreed with the pro-Russian rebels would hold up.
Fighting has already flared up in eastern Ukraine overnight into Sunday, killing one woman and injuring at least four people and jeopardizing a ceasefire struck less than two days earlier.
Any worsening of the crisis, which has caused the sharpest confrontation between Russia and the West since the Cold War, could boost gold as it is seen as an alternative investment during times of political and financial uncertainties.
For now, the strength in the dollar is souring demand for bullion. Hedge funds and money managers decreased their bullish futures and option bets in gold for a third consecutive week to the lowest since June, the Commodity Futures Trading Commission said on Friday.
Physical demand picked up last week as gold fell to a near three-month low, also lending some support to prices.
Source: CNBC
