Economic news

Gold Firms as U.S. Jobs Data miss Cements Low Rates View

May 10 (Reuters) - Gold prices inched higher on Monday to trade near a three-month peak hit last week after weaker-than-expected U.S. jobs data supported hopes that interest rates will remain low for some time, bolstering the metal’s appeal.

Spot gold was up 0.1% at $1,832.26 per ounce by 0315 GMT, after hitting its highest since Feb. 11 at $1,842.91 in the previous session.

U.S. gold futures were up 0.1% at $1,832.60 per ounce.

“The U.S. jobs report is pretty much the start and finish of the story for gold at the moment. It has really tightened expectations out of the market, at least at the margins of Federal Reserve rate hikes,” IG Market analyst Kyle Rodda said.

With the momentum to the upside, $1,850 will be the next key level to watch for gold, he added.

Data released on Friday showed U.S. job growth unexpectedly slowed in April, as businesses scrambled for workers and raw materials amid rapidly improving public health and massive government aid.

The 266,000 jobs that U.S. firms added last month were “nowhere near” what was expected, a Federal Reserve official said.

The U.S. central bank has pledged to keep interest rates near zero until inflation and employment pick up.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.

The dollar index languished near a more than two-month low against its rivals.

Reflecting increased investor interest in gold, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.6% on Friday.

Speculators increased their bullish positions in COMEX gold and silver contracts in the week to May 4.

Palladium rose 0.5% to $2,941.50. Silver gained 0.8% to $27.64, while platinum was up 0.6% at $1,256.96.

(Reporting by Shreyansi Singh in Bengaluru; Editing by Subhranshu Sahu)

Source: Reuters


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