Gold retains gains as investors await jobs report

Gold retains gains as investors await jobs report

5 May 2015, 09:24
News
0
446

Overnight, gold retained gains but held below $1,200/oz as investors looked ahead for US nonfarm payrolls later in the week for clues on when the US Federal Reserve will hike interest rates.

Spot gold was little changed at $1,186.91/oz by 3.32am GMT, gaining 0.8% on Monday, snapping a three-day losing streak, buoyed by holiday-thinned trading.

Silver gained for a third straight session, after climbing to a four-week high on Monday. It was up 3c or 0.18% at $ 16.42.

Platinum was up 74c or 0.06% at $1,145.74 and palladium lost 67c or 0.09% to $779.33.

"The market will remain focused on the US payrolls number to be released this week," said ANZ analyst Victor Thianpiriya.

"A weak print could see gold push above $1,200."

The recovery of the US economy is still questionable as recent data have been mixed, with many traders pushing expectations of a rate hike from June to later this year.

In the meantime, strong reports could prompt the Fed to raise interest rates soon, a move seen by investors as undermining demand for the gold. Speculation over the timing of a rate hike has kept markets on edge.

On Monday Chicago Fed president Charles Evans said nothing clear on the matter. Rate hikes could begin this year, though with inflation uncomfortably low and the unemployment rate still too high, the Fed should hold off on raising rates until early next year, he said.

Wing Fung Financial Group’s head of research, Mark To, commented that an early rate hike this year was not as unlikely as markets believe.

"Gold prices are going to move around $1,200 because of the uncertainty over the timing. The dominant factors influencing gold are interest rates and monetary policy," said Mr To.

Market players were also eyeing the forex market for hints.

On Tuesday the greenback was slightly stronger against its peers, jumping against the euro and the pound in thin trade with several financial hubs shut for holidays. Further strength in the dollar could put a cap on gold’s gains.

Share it with friends: