June 2, 2017 / 10:41 AM / 2 months ago

PRECIOUS-Gold gains after disappointing U.S. jobs data

3 Min Read

    * Palladium hits highest since Sept 2014
    * Gold, yields gain on slower U.S. jobs growth
    * Gold headed for fourth week of gains

 (Recasts, adds quote)
    By Zandi Shabalala
    LONDON, June 2 (Reuters) - Gold prices rose to a near
six-week high on Friday in response to disappointing U.S.
non-farm payrolls data that lowered expectations for more
aggressive U.S. interest rate increases.
    Data showed that U.S. job growth slowed in May and
employment gains in the prior two months were not as strong as
previously reported, suggesting the labour market was losing
momentum.             
    A slow recovery in the world's biggest economy dents the
likelihood for higher interest rates which benefits non-interest
yielding and safe-haven gold.
    Spot gold        was rose 0.7 percent to $1,274.39 an ounce
at 1440 GMT, its highest since April 25, headed for its fourth
week of gains
    U.S. gold futures         were up 0.6 percent at $1,278.30
an ounce.
    "This is not the kind of report people had hoped for, and
that has put pressure on the dollar and yields, and gold is
always happy to profit from that," Georgette Boele, commodity
strategist at ABN AMRO, said.
    She said the data would cause investors to temper their
expectations of rate increases this year and next year, putting
pressure on the dollar and U.S. bond yields and helping gold.
    Expectations for stronger jobs data and upbeat data from
U.S. factory activity had pushed gold to a one week low earlier
on Friday.             
    "There is good room to fall back to $1,200 within the next
three months," Dominic Schnider at UBS Wealth Management in Hong
Kong, said.
    "The world economy is still in good shape, people are
risk-on, inflation is levelling off, there is no real big
inflation threat anymore, policy is normalising still."
    In other markets, global stocks hit a record high while the
dollar strengthened, making gold more expensive for holders of
other currencies.                         
    Among other precious metals, palladium        was up 1.4
percent at $834.97 an ounce after earlier touching $835.90, its
highest level since September 2014.
    Silver        rose 0.7 percent to 17.39 per ounce while
platinum        firmed 1 percent to $937, but poised to end the
week lower.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Greg Mahlich and Jane Merriman)
  

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