This Monday in European trading time gold futures climbed higher. The contacts went further off two-week low recorded the last session. On Friday the US non-farm payrolls data was announced. Yet wasn’t strong enough to change the course of Fed’s monetary stimulus.
In European time gold futures for delivery in April rose by 0.3% to trade at $1,581.20 per ounce on the Comex division of the New York Mercantile Exchange.
Earlier on Monday future gold prices recorded a 0.4% jump hitting a session high of $1,582.30 per ounce. Comex gold prices dropped to $1,560.60 per ounce on Friday. That was the lowest level since 21st February.
Analysts believe that gold will try to find support at the $1,554.80 low level from 21st February. The high from 28th February is considered to be the next resistance level of $1,602.20 per ounce.
The initial yellow metal decline was on the back of data posted by the US Department of Labor. The expectations were seeing a 160,000 jobs increase, though the authority pointed a 236,000 rise in February.
The jobless rate edged down from 7.9% to 7.7% in January according to the Department of Labor data.
Experts underlined that the unemployment rate is still high. Therefore Fed’s asset-buying program is not very likely to come to its end.
Earlier this year the Federal Reserve stated that as long as the jobless rate remains above 6.5% accommodative stimulus will continue.
Since the beginning of 2013 Fed statements were the strongest driver for gold prices. Any change in expectations on quantitative easing developments pushed gold into direction. The US central bank was the main reason the long-term bull performance of gold. Yet, Fed could also bring the end of the bullish run.
Over the weekend a bunch of economic reports came out of China. That brought investors’ excitement as they had a significant driver to react to.
Chinese official data points out a 3.2% consumer prices increase in February on a year over year basis. That exceeds the previous 3% expectations. Also the numbers jumped significantly from the 2% increase rate recorded in January.
Yellow metal prices are in narrow relation with consumer price increases. That is because gold is seen as a hedge against inflation risk.
Since the beginning of March gold has traded in a tight average range from $1,560 to $1,580 per ounce in term of technical analysis.
Recently the investment appeal of the precious metal has weakened. That is mainly because investors shifted their appetite for gold to global equities. Meantime there more hopes that the US economy is recovering on a higher pace.
