Gold prices crawl up, shaky U.S. jobs data supports
SINGAPORE (Reuters) - Gold inched up on Monday as lacklustre U.S. jobs data supported expectations for continued monetary easing from the Federal Reserve, a session after concerns about the withdrawal of such a policy drove bullion to its lowest in over four months.
The unemployment rate remained at a lofty 7.8 percent in December, even though U.S. employers kept their pace of hiring steady, suggesting fragile improvement in the labour market.
Gold dropped to a more than four-month low of $1,625.79 on Friday, after minutes from the Fed's last meeting showed officials were increasingly concerned about the impact of quantitative easing on financial markets.
That spooked gold investors who had expected the central bank to keep pumping cash into the market - a key driver behind the metal's twelfth year of gains in 2012.
"There is still hope for gold," said a Sydney-based trader. "I'm much less sanguine about the state of the U.S. economy, as some of the leading indicators are suggestive of a slowdown in U.S. payrolls growth and a stalling in the drop in the unemployment rate."
The Fed will have to maintain its monetary stimulus as a result, he said, helping gold remain attractive to investors worried about that rampant cash printing by the central bank could debase paper money and fuel inflation.
Spot gold had inched up 0.3 percent to $1,661.54 an ounce by 0246 GMT, after falling for two sessions straight and ending last week little changed.
U.S. gold gained 0.8 percent to $1,662.10.
Technical analysis was less upbeat. Spot gold could revisit last Friday's low of $1,625.79 during the day, as indicated by its wave pattern and a Fibonacci ratio analysis, said Reuters market analyst Wang Tao.
Spot gold 24-hour technical outlook: here
"We think gold still has a chance of breaking above $1,800 and even reach $1,900 in the first half of the year due to fragile economic recovery in the United States and easing policies by central banks," said Li Ning, an analyst at Shanghai CIFCO Futures.
But prices may weaken in the second half if the global economy gets on a steady path to recovery and stimulus measures taper off, she added.
Hedge funds and money managers increased the size of their net longs in gold futures and options in the week to December 31, ending two weeks of declines, Commodity Futures Trading Commission data showed on Friday.
Elsewhere, sales of U.S. American Eagle gold coins in 2012 were the weakest in five years despite a strong finish, hurt by declining price volatility, dealers said.
(Editing by Joseph Radford)
- Tweet this
- Share this
- Digg this
- India passes halfway mark in election with BJP gaining strength
- Bajaj Auto says union at Chakan plant plans work stoppage
- Japan will conduct Pacific whale hunt in wake of court ruling
- S.Korea ferry captain rushed back to bridge as ship listed - crewman
- Drone risks damage at record depth in search for Malaysian plane
The Election Commission has lifted a ban on a top aide of Hindu nationalist opposition leader Narendra Modi that had threatened to hobble his efforts to win votes in the country's most populous state. Full Article | Full Coverage