Gold up in wake of weak US jobs data
Spot?gold?may retrace to a support at $1,315 per ounce, as it failed to break a resistance at $1,330, according to Reuters technical analyst Wang Tao. Photograph: (Getty)
Gold rose today as the dollar slid after a weaker-than-expected US jobs data trimmed expectations of a Federal Reserve rate hike in September.
US employment growth slowed more than expected in August after two straight months of robust gains and wages were tepid.
"The disappointment in the nonfarm payrolls data has been translated into optimism for goldprices at the moment. We can expect prices to further rebound to $1,350 in a short-term," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
Spot gold was up about 0.2 per cent at $1,326.83 per ounce by 0652 GMT. The metal rose as much as over 1 per cent on Friday.
U.S. gold futures were up 0.3 per cent at $1,330.50.
"Gold should continue to see interest support following Friday's jobs data as the chances of an interest rate rise in September pull back," MKS PAMP Group precious metals trader Sam Laughlin said in a note.
"The support broadly sits around $1,315 - $1,320, while bulls will be looking for a break above $1,330," Laughlin said, adding that there was good buying interest from Japan on Monday.
Trading on Monday is expected to be quiet with the US out for the Labour Day holiday.
Spot gold may retrace to a support at $1,315 per ounce, as it failed to break a resistance at $1,330, according to Reuters technical analyst Wang Tao.
On Friday, Richmond Federal Reserve Bank President Jeffrey Lacker said the US economy appears strong enough to warrant significantly higher interest rates.
Wall Street's biggest banks are sticking to bets that the Fed will raise interest rates once this year, and the increase would most likely occur in December after a tepid employment report for August quashed most talk of a move as early as this month.
Hedge funds and money managers reduced their bullish stance in COMEX gold contracts in the week to Aug. 30 to the lowest in nearly three months, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
"Longs (positions) have been suffering from price correction and would be quite hard for them to sustain when prices are volatile. Speculators have to cut losses somehow," Wing Fung analyst To said.
The dollar's index against a basket of six major currencies was down 0.2 per cent at 95.664. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Spot silver was mostly flat at $19.40 an ounce, hovering near a two-week high of $19.44 hit on Friday.(Reuters)