Gold price rebounds from two-week low

0
197

Gold jumped 2 percent on Friday after US payrolls data came in much weaker than expected, denting expectations that the US Federal Reserve will push ahead with its first interest rate rise in nearly a decade this year.
Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added in August, the Labor Department said.
Gold had earlier slid to its lowest in two weeks on expectations for an upbeat report that would support the case for a near-term rate rise. That would lift the opportunity cost of holding non-yielding bullion while boosting the dollar.
It quickly rebounded in heavy volumes after the report, rising nearly 2 percent to a session high of $1,136.10 an ounce.
Spot gold was up 1.9 percent at $1,135.20 an ounce at 1334 GMT, while US gold futures GCv1 for December delivery were up $20.80 an ounce at $1,134.50.
“The … data was something of a surprise. It wasn’t a great reading the previous month, but that’s also been downgraded,” Mitsubishi analyst Jonathan Butler said.
“This, together with inflation remaining low, probably means the Fed is going to have to blink once again before raising rates, and of course in the short term that’s positive for gold and precious metals.”
US and European stock markets sank in response to the drastically poorer than expected US jobs numbers, while the dollar fell to a two-week low against the euro on expectations the Fed will hold off raising interest rates until early next year.
Among other precious metals, platinum recovered to $906 an ounce, up 0.7 percent, after earlier slumping to $888 an ounce, its lowest since December 2008.
Platinum had been hit by revelations that Volkswagen had falsified US vehicle emission tests, which some investors believe could affect demand for diesel cars. The metal is widely used in auto catalysts, particularly for diesel engines.
“News about the VW investigations has amplified the negative sentiment (toward platinum), even though it’s probably too early to appropriately gauge the impact,” UBS said in a note.
Palladium was up 3 percent at $689 an ounce, having earlier touched a three-month high of $695.50 an ounce.
The metal, mainly used in catalysts for gasoline engines, was boosted by data showing strong car sales by major automakers, and from some expectations that demand for gasoline cars could increase after the Volkswagen scandal.
Silver was up 3.2 percent at $14.92 an ounce.

LEAVE A REPLY

Please enter your comment!
Please enter your name here