Gold stalls as US jobs data keeps door open to Sept Fed hike

The Pak Banker - - BUSINESS -

Gold stead­ied on Mon­day af­ter two ses­sions of gains, hurt by the dol­lar's rise ver­sus a cur­rency bas­ket af­ter a pay­rolls re­port sup­ported ex­pec­ta­tions that U.S. in­ter­est rates could rise as early as Septem­ber.

Prices of the me­tal have fallen in the sec­ond half of this year on the prospect of ris­ing rates, which would lift the op­por­tu­nity cost of hold­ing bul­lion while boost­ing the dol­lar.

Gold has found sup­port af­ter slid­ing be­low $1,100 an ounce in July, but re­mains un­der pres­sure.

Spot gold was at $1,093.45 an ounce at 1003 GMT, lit­tle changed from late Fri­day, while U.S. gold fu­tures for De­cem­ber de­liv­ery were down 80 cents an ounce at $1,093.30.

"Since Fri­day, gold has fol­lowed the dol­lar move af­ter the pay­rolls," ABN Amro an­a­lyst Geor­gette Boele said. "Gold had a big move down at the end of July, and since then it has just stayed be­low $1,100," she said. "Gold prices just need a new ac­cel­er­a­tion point. We still ex­pect the in­ter­est rates in the U.S., and the dol­lar, to (pro­vide that)."

The dol­lar rose 0.3 per­cent against a bas­ket of cur­ren­cies on Mon­day, climb­ing back to­wards near four-month highs in the wake of Fri­day's em­ploy­ment data.

U.S. non­farm pay­rolls in­creased by 215,000 in July, less than the 223,000 rise that econ­o­mists had ex­pected, but still seen in line with a tight­en­ing labour mar­ket.

Pay­rolls data for May and June was re­vised to show 14,000 more jobs cre­ated than pre­vi­ously re­ported. "July non­farm pay­roll data help firm the case for a Septem­ber rate hike," Bar­clays Cap­i­tal said in a note.

"Global phys­i­cal de­mand in Q2 15 is the weak­est it has been in two years, and de­mand in China and In­dia has failed to pick up due to lower prices. We main­tain our con­vic­tion that Q3 15 will be the weak­est quar­ter for gold."

Gold fell for a sev­enth week in a row last week, its long­est such re­treat since 1999, hav­ing strug­gled to pull away from a 5-1/2-year trough of $1,077 reached in July.

Hold­ings of the world's largest gold-backed ex­change-traded fund, SPDR Gold Shares, slipped to their low­est since Septem­ber 2008 at 21.47 mil­lion ounces on Fri­day.

Spot plat­inum was up 0.5 per­cent at $964.25 an ounce and pal­la­dium was up 0.2 per­cent at $599, both still close to last week's multi-year lows. Sil­ver was up 0.6 per­cent at $14.92 an ounce.

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