Gold price bounces from two weeks low as stimulus seen to continue
Gold edged up on Monday, off a two-week low hit in the previous session on better-than-expected U.S. jobs data, as the Federal Reserve is expected to continue to prop up the economy through 2013 with monetary stimulus, giving support to gold.
U.S. employers added a greater-than-expected 236,000 workers to their payrolls in February and the jobless rate fell to a four-year low, but Wall Street expects the Fed to continue its bond buying programme through 2013.
The Fed's loose monetary policy has helped push gold to record highs in recent years, as investors seek a hedge against a rising inflation outlook due to cash printing by the central bank.
"Gold prices have built in the view that the U.S. recovery is on a good footing and by the end of the year we should see the Fed exiting the stimulus, which should be bearish for gold," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
But a short-term bounce in gold is likely, as concerns about the strength of the U.S. recovery and expectations of aggressive monetary easing from the Bank of Japan next month might spur buying, he added.
Spot gold inched up 0.2 percent to $1,580.66 an ounce by 0306 GMT, recovering from a two-week low of $1,560.80 in the previous session.
U.S. gold was also up 0.2 percent, at $1,579.90.
Technical analysis suggested spot gold looks neutral in the range of $1,564.44 to $1,585.90 an ounce, but is biased to fall below $1,564.44, said Reuters
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