Gold rises in choppy trade after US jobs data

Dec 06 2013, 22:03 IST
Comments 0
Gold climbed in volatile trade, bouncing from session lows reached after US jobs data beat forecasts, as traders who had bet on even larger losses rushed to cover their positions. Gold climbed in volatile trade, bouncing from session lows reached after US jobs data beat forecasts, as traders who had bet on even larger losses rushed to cover their positions.
SummaryGold climbed in volatile trade, bouncing from session lows reached after US jobs data beat forecasts...

Gold climbed in volatile trade on Friday, bouncing from session lows reached after US jobs data beat forecasts, as traders who had bet on even larger losses rushed to cover their positions.

The market fell immediately after the figures showed that US employers had hired more workers than expected in November and the unemployment rate had dropped to a five-year low of 7 percent, which strengthened the case for the Federal Reserve to start reducing bond purchases as soon as this month.

But the slide stopped short of revisiting a five-month low reached earlier this week of $1,211.36, which led holders of short positions, or bets that prices would fall steeply, scrambling to cover.

Spot gold was up 0.7 percent at $1,233.41 an ounce at 1439 GMT, off an earlier low of $1,211.80. U.S. gold futures for February delivery were up at $1,232.60.

"We are seeing some emerging profit-taking on short positions similar to what we saw earlier in the week. It could indicate support is building in the $1,200 area and could eventually lead to a greater amount of short-covering," Saxo Bank analyst Ole Hansen said.

Gold prices have now erased some of their losses for the week but were still down 1.2 percent after having dropped sharply on Thursday as data showed the U.S. economy grew faster than estimated in the third quarter.

That also helped support the case for the Fed to start scaling back its bond-buying programme. Ultra-loose U.S. monetary policy has been a key driver of higher gold prices in recent years as it maintains pressure on interest rates while stoking fears of inflation.

"Whether the Fed votes to begin tapering in December or January, the recent data has been fairly encouraging," Credit Suisse analyst Tom Kendall said. "The economy continues to move in the right direction."

INDIAN GOLD EXPORTS UNDER PRESSURE

In the physical market, Indian gold premiums remained supported at the record $160 an ounce they hit on Thursday as the wedding season fuelled demand, while supplies there remained low.

"There is recycling going on," said Rammohan Kamath, secretary of Calicut Bullion Dealers Association. "Jewellers are unable to source supplies properly through official channels."

Indian gold imports may fall 70 percent this quarter from 255 tonnes in the year-ago period and are expected to be half their usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.

Premiums in other parts of Asia remained stable

Single Page Format
Ads by Google

More from Commodities

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...