LONDON: Gold rose on Friday after a US nonfarm payrolls report came in slightly below expectations, but signs that the world's largest economy is growing at a solid pace, a stable dollar and higher equities capped the upside.
Nonfarm payrolls increased by 192,000 new jobs last month, compared with a 197,000 rise in February and less than an expected 200,000. The unemployment rate was unchanged at 6.7 percent.
Even so, with a solid pace of hiring for a second month, the economy appears to be recovering from a winter-linked slowdown earlier in the year. Spot gold rose 1 percent to a session high of $1,301.60 an ounce after the data release.
It was up 0.8 percent at $1,297.80 an ounce by 1419 GMT.
Friday's gains helped snap a third straight week of losses, which seemed likely after the metal hit a seven-week low of $1,277.29 on Tuesday.
Gold futures for April delivery rose 1.1 percent to $1,298.00 an ounce.
"The initial market reaction was for gold to test $1,300, but it didn't break through that level because the March (jobs)number was still good ... only slightly worse than expected," VTB Capital analyst Andrey Kryuchenkov said.
"But then if you think about it, February was revised up and the jobless rate remains flat, which suggests that QE3 tapering will go ahead at the current pace," he added.
"When we look at the second half of the year, even as Chinese and Indian physical demand comes back, the upside for gold will remain limited simply because the dollar will be stronger."
The dollar index steadied below a seven-week low, while global equities advanced after the US data. Gold prices drew some support after Iraq's central bank said on Friday its gold reserves had reached 90 tonnes after it bought 60 tonnes over the past two months.
"We wonder where gold would otherwise have found its floor if the official sector bid hadn't been in the market of late; we suspect a good deal lower," UBS said in a note.
Comments
Comments are closed.