Gold inches towards $1,200/oz as lukewarm jobs report maintains status quo

May 8, 2015 - 3:04 PM GMT
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Gold futures moved higher following the release of a mixed US non-farm payrolls report that won’t force the Federal Reserve to rush into raising interest rates.

Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $8.50 at $1,190.70 per ounce. Trade has ranged from $1,180.50 to $1,193.00.

The US economy created 223,000 jobs in April, which was essentially in line with the 228,000 forecast, while the unemployment rate dropped to 5.4 percent from 5.5 percent in March. Average hourly earnings increased 0.1 percent, slightly below the 0.2 percent expected.

But payroll employment for February was revised from 264,000 to 266,000, and the change for March was revised from 126,000 to 85,000. With these revisions, employment gains in February and March combined were 39,000 lower than previously reported.

“Gold’s getting a little bit of a lift from the downward revision,” a US-based trader said. “But more than anything, this report will keep the markets in a nice equilibrium. It shows that the second quarter is looking at least OK but at the same time [these figures aren’t] going to change the Fed’s trajectory.”

The members of the Fed’s policy board are locked in what has become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008.

In the wider-markets, the dollar was 0.28 percent stronger at 1.1236 against the dollar, while the Dow Jones industrial average and S&P 500 were up 1.38 percent and 1.16 percent.

Elsewhere, the Chinese trade surplus at $34.1 billion in March was up from $3.1 billion in February but below the expected $34.5 billion. As well, exports and imports both fell further than expected.

German industrial production disappointed at -0.5 percent as did the German trade balance at 19.3 billion euros. But Italian industrial production at 0.4 percent was better than expected.

As for the other precious metals, Comex silver for July delivery were up 16.3 cents at $16.460 per ounce. Trade has ranged from $16.260 to $16.555.

Platinum futures for July delivery on the Nymex were up $9.80 at $1,141.20 per ounce, while the most-actively traded palladium contract was at $797.45 per ounce, up $11.70.