NEW YORK/LONDON: Gold rose almost 1 percent in thin holiday trade o n M onday, breaking ranks with other commodities and equities, after disappointing US jobs data last week revived speculation that the Federal Reserve might try to stimulate the US economy.
The precious metal, which fell more than 2 percent last week, also received a boost from physical buying out of India following the end of a jewelers strike.
A bigger-than-expected increase in Chinese consumer prices in March contributed to the buying of gold as an inflation hedge.
Bullion has dropped 8 percent since the end of February after a run of strong US economic data convinced many fund managers that the Fed would not launch another round of stimulus.
However, market watchers said last Friday's data showing US employers had hired far fewer workers in March than in previous months could keep the door open for more US stimulus.
"In the next few months, the market will not only begin to price in the Fed's sustained policy but will price in for further monetary action," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund.
Spot gold was up 0.9 percent at $1,645.40 an ounce by 2:41 p.m. EST (1841 GMT).
US gold futures for June delivery settled up $13.80 an ounce, or 0.85 percent, at $1,643.90. Trading volume was light, around 40 percent of the 30-day average, preliminary Reuters data showed, with most European financial markets still closed for Easter.
Gold, which has taken to tracking riskier assets, rose on Monday despite losses in equities and other commodities led by crude oil.
END OF INDIA JEWELERS' STRIKE HELPS
Also lifting gold was decent physical demand from India and China.
Gold jewelers in India, the world's largest consumer of the yellow metal, replenished stocks after a three-week long strike and ahead of Akshaya Tritiya, a gold buying festival slated later in the month.
Silver was down 0.3 percent at $31.62 an ounce
Silver imports into India, the biggest consumer of the white metal, are likely to decline up to 27 percent this year on expectations of volatile prices, despite import duty remaining unchanged, the top bullion importer ScotiaMocatta said on Monday.
Among other precious metals, spot platinum rose 1.1 percent to $1,608.15 an ounce and spot palladium edged up 0.1 percent to $639.03 an ounce.
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