Gold surges to highest in over six weeks as US jobs data disappoint

GOLD held steady after hitting its highest in over six weeks earlier on Monday, buoyed by disappointing US jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States.

US 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 4.30%.

Spot gold had climbed 0.10% to $1,280.74 per ounce by 0352 GMT. It hit a peak of $ 1,281.95 an ounce early in the session, its strongest since April 21.

US gold futures for August delivery were up 0.20% at $1,283.30 an ounce.

Pa ll a d i u m on Monday matched its June 2 high of $843.10 an ounce, which was the metal’s strongest since September 2014.

“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 1.10% 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,” Mr. Hynes said. Hedge funds and money managers raised their net long position in COMEX gold for the second straight week, hitting the highest level in nearly a month, and also raised it in silver, US Commodity Futures Trading Commission data showed on Friday.

Among other precious metals, silver hit a high of $17.585 an ounce early in the session, its strongest since April 26, while platinum was down 0.60% at $946.10.