Gold prices climb 1 pct after US payrolls data

Feb 01 2013, 20:34 IST
Comments 0
SummaryGold prices rose above $1,680 an ounce on Friday in line with a rally in stocks and other commodities.

Gold prices rose above $1,680 an ounce on Friday in line with a rally in stocks and other commodities after U.S. non-farm payrolls data showed modest job growth in January and upward revisions in December and November.

U.S. stock futures extended gains, European equities climbed and oil prices rallied more than $1 a barrel after the numbers. Gains in the euro versus the dollar also supported gold.

Spot gold was up 0.9 percent at $1,677.70 an ounce at 1438 GMT, having earlier touched a high of $1,681.70. U.S. gold futures for February delivery were up $17.20 an ounce at $1,679.20.

Gold's link to assets seen as higher risk such as stocks and industrial commodities has fluctuated over the past year.

Earlier this week, weaker-than-expected U.S. growth data boosted prices as it suggested hopes the economy was gaining traction, reducing the prospect of more monetary easing, were premature.

But on Friday gold benefited from the well received jobs data as the rise in other assets pulled it higher.

"The job creation in the United States continues despite a smaller-than-expected rise this month," Saxo Bank analyst Ole Hansen said. "Risk is very much on, with the dollar weaker and both bonds and stocks rising on the news."

The dollar extended losses against the euro and cut gains versus the yen following the data, and U.S. stocks opened higher.

Gold is set to rise 0.9 percent this week, clawing back some of the previous week's 1.5 percent loss. It remains flat on the year, however, as signs of improvement in the U.S. and euro zone economies boosted investor appetite for other assets.

Short-term moves aside, the metal is likely to remain rangebound, Citigroup analyst David Wilson said. "There is potential for more upside as we get towards the end of February and the U.S. starts looking at the whole debt issue, but we're agnostic on a short- to medium-term view."


From a technical perspective, near-term resistance is seen at gold's high last week of $1,683 an ounce, with a further band of resistance seen below $1,700, a level it struggled repeatedly to break last month.

"Resistance is at $1,696, the 2013 high, which is also where the bearish trend line comes in," ScotiaMocatta said in a note. "We are bearish gold so long as we trade below this resistance level."

A senior official said India's central bank plans to introduce three to four gold-linked products in the next few months, in an effort to

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...