Gold gains on hopes for low rates post bleak US jobs data

Gold prices rose on Monday, hovering near a three-month peak, as a miss in the U.S. jobs numbers last week cemented expectations that interest rates will remain low for some time, denting the dollar and boosting non-yielding metal's appeal.

Spot gold was up 0.4% to $1,836.80 per ounce by 1022 GMT, after hitting its highest since Feb. 11 at $1,842.91 on Friday. U.S. gold futures gained 0.4% to $1,838.10.

"We are seeing a carry over this morning from Friday's non-farm payrolls figures which were surprisingly disappointing. Clearly both the U.S. dollar and yields remain on the back foot, supporting gold," said independent analyst Ross Norman.

U.S. nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, pushing the dollar to a more than two-month trough, making gold less expensive for holders of other currencies.

Lower-than-expected nonfarm payrolls numbers came as a speed bump on investors hopes over roaring recovery in the world's largest economy and tampered down bets over U.S. Federal Reserve tightening policy earlier than expected.

The U.S. central bank has pledged to keep interest rates low until inflation and employment pick up. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

"After weeks of snail-like progress higher, gold has suddenly accelerated higher, driven by a weaker U.S. dollar and ebbing fears of an early Federal Reserve taper," OANDA senior market analyst Jeffrey Halley said in note.

Elsewhere, palladium rose 1.3% to $2,964.85 per ounce after hitting an all-time high last week on supply shortfall worries.

"We expect the (palladium) market to continue tightening over the next 3 months on auto restocking and the lingering impact from Norilsk supply disruptions," Citi analysts said in a note.

UBS expects the palladium market to be undersupplied by about 1 million ounces in 2021.

Silver climbed 1.1% to $27.74 while platinum was up 1.3% to $1,265.51.