On Monday gold prices extended gains to hit a seven-week high on Monday,
after downbeat U.S. nonfarm payrolls data prompted investors to
push back expectations for a rate hike in the U.S. to the end of the
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery touched an intraday peak of $1,223.40 a troy ounce, the most since February 17, before trading at $1,219.30 during U.S. morning hours, up $18.40, or 1.53%.
Futures were likely to find support at $1,178.20, the low from March 31, and resistance at $1,236.70, the high from February 16.
Gold prices are up nearly 6.5% since hitting a recent low of $1,140.60 on March 17, as signs that the U.S. economy slowed significantly in the first quarter fuelled bets the Fed will hold off on hiking interest rates until late 2015.
On Friday the US Labor Department reported Friday that the U.S. economy added just 126,000 new jobs in March, the smallest increase since December 2013 and sharply below forecasts for a gain of 245,000.
The disappointing labor report makes it more likely that the Federal
Reserve will wait until the end of the year to raise interest rates from
record low levels.
Investors had previously estimated that U.S. interest rates could start to rise as early as June.
A delay in raising interest rates would be a strong driver for gold,
as it decreases the relative cost of holding on to the metal, which
doesn't offer investors any similar guaranteed payout.