Gold rose on Monday as the dollar was weighted down by the weaker-than-expected US jobs data after two consecutive months of robust gains, effectively reducing investors’ excitement about the Federal Reserve’s rate hike this month.
Looking back, the number of new employments created on July increased by 275,000, a figure revised from a previous estimate of 255,000 gains. The recent release for August added 151,000 jobs, which is lower than the expected 180,000. The unemployment rate in the country remained unchanged at 4.9%, defeating expectations for a downtick to 4.8%. The report also mentioned that the average hourly earnings rose 0.1 in August, a lower number than the expected 0.1%.
The yellow metal’s prices are based on the US economy and the dollar in which it is priced. A weaker US economy means a weaker dollar, and therefore it is much better to invest on non-yielding bullions like the safe haven gold. The previous disappointing US data have propelled the price of said metal today.
“The disappointment in the nonfarm payrolls data has been translated into optimism for gold prices at the moment. We can expect prices to further rebound to $1,350 in a short-term,” said head of research at Hong Kong’s Wing Fung Financial Group, Mark To.
After rising as much as over 1% on Friday, spot gold was up about 0.2% at $1,326.83 per ounce today by 0652 GMT. However, it 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.
“The support broadly sits around $1,315 – $1,320, while bulls will be looking for a break above $1,330,” MKS PAMP Group precious metals trader Sam Laughlin said, adding that there was good buying interest from Japan on Monday.
On the other hand, US gold futures were up 0.3% at $1,330.50, spot silver was mostly flat at $19.40 an ounce, hovering near a two-week high of $19.44 hit on Friday, platinum gained 0.5% to $1,064.25, and finally palladium rose 0.3% to $677.25.
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