Gold hits highest since late April after weaker US jobs data - FINANCIAL-24
LONDON: Gold held steady after hitting its highest in over six weeks on Monday, buoyed by disappointing
U.S. jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States.
U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the
unemployment rate falling to a 16-year low of 4.3 percent.
Spot gold had climbed 0.1 percent to $1,280.90 per ounce by 0805 GMT. It hit a peak of $1,282 an ounce early in the session, its strongest since April 21.
U.S. gold futures for August delivery were up 0.3 percent at $1,283.4 an ounce.
"We do expect gold to hit some turbulence as we approach the June Fed rate hike, but things could open up for the precious metal post-meeting if the central bank's language remains
dovish," INTL FCStone analyst Edward Meir said in a note Higher interest rates put pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
"We had an excellent Friday where gold really reacted. It is taking a pause in Asian trading this morning," said ANZ analyst Daniel Hynes referring to the 1.1-percent jump in prices for the
metal prices in the previous session.
Meanwhile, following a militant attack on a nightlife district of London this weekend, British Prime Minister Theresa May will resume campaigning on Monday for the national election
due in three days. The vote is expected to be much tighter than previously predicted.
"(European elections have) been an underlying supportive factor for some time providing some good safe-haven buying but not enough to spark any panic buying. That's why we think things
will be relatively subdued," Hynes said.
The dollar index, which tracks the greenback against a basket of six major currencies, edged higher on Monday, but was not far from Friday's low of 96.654, its weakest since Nov. 9.
Palladium hit its strongest since September 2014 at $844.60 on Monday.
"It is likely technical factors which have supported palladium in recent days (the break of the previous high)," UBS analyst Giovanni Staunovo said.
"I am a little bit cautious in the near term and expect setbacks due to elevated speculative positioning and relatively weak car (sales) in the main palladium markets." Among other precious metals, silver hit a high of $17.585 an ounce early in the session, its strongest since April 26. Platinum fell 0.1 percent to $951 an ounce.
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