Gold Continues to Gain After Weak Jobs Data

09/10/2017 15:16 AST

Gold prices gained Monday, extending the advance that followed the Friday release of weaker-than-expected U.S. jobs data.

The precious metal was up 0.46% at $1,281.93 a troy ounce in midmorning trade.

Copper, meanwhile, was flat at $6,654 a metric ton, with base metals struggling to find direction as Chinese traders caught up from their week of public holidays.

While economists polled by The Wall Street Journal had forecast the addition of 80,000 jobs to the U.S. economy, nonfarm payrolls data revealed that the employment market actually lost 30,000 jobs.

The dollar fell after that news, and that "is presumably the reason why gold gained on Friday," Commerzbank said in a morning note. The WSJ Dollar Index, which measures the currency against a basket of 16 others, dropped 1% after the jobs report Friday and edged down a further 0.01% Monday to 86.94.

That said, "the poor U.S. labor market report is clearly regarded as only a short-term anomaly," Commerzbank added.

Gold's uptick after the jobs data lifted the metal off a two-month low. In the coming days, gold may find further support from key resistance barriers and ongoing geopolitical risk factors, said Ipek Ozkardeskaya, a senior market analyst at London Capital Group.

Traders were watching events in Catalonia, where the regional government seemed intent on pursuing independence despite pro-Spanish counter-demonstrations over the weekend, Commerzbank said.

Meanwhile, President Trump appeared to once again threaten North Korea on Saturday, tweeting that "only one thing will work" when dealing with the country. This was also contributing to global risk sentiment, bulliondesk.com said in a morning report.

Looking ahead, investors were waiting to see whether continued expectations of a Federal Reserve rate increase would support the dollar or whether ongoing geopolitical risk would buoy gold.

Among precious metals, silver rose 0.59% to $16.92 a troy ounce, platinum rose 0.19% to $917.50 a troy ounce, and palladium rose 0.84% to $930.25 a troy ounce.

Among base metals, zinc rose 0.54% to $3,262 a metric ton, aluminum rose 0.05% to $2,147.50 a metric ton, tin rose 0.83% to $20,775 a metric ton, nickel rose 1.99% to $10,785 a metric ton and lead fell 1.09% to $2,506.50 a metric ton.

Dow Jones Newswires