Gold Rises as US Payroll Misses Expectations

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Gold Rises as US Payroll Misses Expectations

Gold prices were up on Friday, recovering from a three month low after the US payroll data missed expectations and increased the speculation that interest rates would be increased by the Federal Reserve soon.

The bullion gained after the pro-Russian and Ukraine rebels agreed to cease fire as the first step to ending the conflict in Ukraine, which caused a severe standoff between the West and Moscow since the end of the Cold War.

According to Reuters, US employers hired few workers in August and an increased number of Americans gave up the search for employment, providing the US central bank with additional reasons to wait before raising its interest rates.

Senior Currency Strategist for Oanda, an online forex broker based in Toronto, Alfonso Esparza said, “The higher gold prices are reflecting the expectation the Fed will not immediately raise interest rates after the weak job numbers, but ceasefire deflated safe-haven appetite somewhat.”

Spot gold rose 0.4% at $1,266.45 having reached a high of $2.273.45.

In overnight trade, gold hit $1.256.90, the lowest since June 2011. The prices for gold are set to drop 1.5% this week due to economic optimism. December delivery US COMEX gold futures rose to $1.267.20 by 70 cents per ounce.

In the physical gold markets, the demand has been soft with buying picking up. Asian dealers said China’s premiums, gold’s top buyer, increased to $4 to $5 per ounce above the spot prices from the previous session’s $3.

According to Bloomberg, analyst at AnandRathi Commodities Ltd, Abhishek Chinchalkar said, “We do not expect gold to gain much ahead of the release of the US monthly employment report. Most of the data have been coming out from the US of late have been rather impressive and a positive jobs number may further strengthen the dollar and hurt gold.”

In the other precious metals, platinum rose 0.1% to $1,405.75 per ounce, silver rose 0.3% to $19.05 per ounce and palladium rose 0.3% to $886.75 per ounce.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.co