Gold prices hit highest since April

07/06/2017 01:52 AST

Gold prices hit a six-week high on Monday, buoyed by disappointing US jobs data that dimmed the prospects for an aggressive run of interest rate increases in the world’s biggest economy. US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, data showed on Friday, suggesting a loss of momentum in the labor market.

Higher interest rates put pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Spot gold was steady at $1,280.31 per ounce by 1350 GMT, after climbing 1.1 percent on Friday. It hit a peak of $1,282 early in the session, its highest level since April 21.

“Gold has got a bit of a lift from payroll numbers from Friday, which has carried through to today but there is also support from terrorist events,” ETF Securities commodities strategist Nitesh Shah said, referring to an attack in London at the weekend.

“Gold tends to be the port of call when people are anxious and events like that make people anxious,” he said.

“(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 is why we think things will be relatively subdued,” ANZ analyst Daniel Hynes said.

US gold futures were up 0.2 percent at $1,283.10 an ounce. The dollar index, which tracks exchange rates against a basket of six major currencies, kept a lid on gains in bullion by edging higher on Monday. But it was not far from Friday’s low of 96.654, its weakest since Nov. 9.

Arab News