Investing.com - Gold futures held steady in European trade on Monday, after climbing to a two-week high overnight as investors all but ruled out a rate hike later this month following the release of dismal U.S. employment data.
The U.S. economy added just 38,000 jobs in May, the smallest gain since September 2010 and far below expectations for an increase of 164,000. The economy created 123,000 jobs in April, whose figure was revised from a previously gain of 160,000, the Labor Department said Friday.
The downbeat data likely pushed a June interest rate hike from the Federal Reserve off the table, with traders pricing in just a 4% chance for a rate hike this month, down from 21% ahead of the data, according to CME Group's (NASDAQ:CME) FedWatch tool.
Odds for a July rate hike dropped to 32% from 58% a day earlier, while September odds were at about 48%, compared to 66% on Thursday.
Gold is sensitive to moves in U.S. interest rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Market players will be turning their attention to a highly anticipated speech by Federal Reserve Chair Janet Yellen on Monday for further clues on the timing of the next U.S. rate hike. The Fed chief is due to speak about the U.S. economic outlook and monetary policy at the World Affairs Council of Philadelphia at 16:30GMT, or 12:30PM ET.
Gold for August delivery on the Comex division of the New York Mercantile Exchange rose to an intraday high of $1,251.30 a troy ounce, the most since May 23. It last stood at $1,243.25 by 06:48GMT, or 2:48AM ET, up 35 cents, or 0.03%.
On Friday, gold surged $30.30, or 2.5%, its biggest one day gain in nearly three months, as the U.S. dollar plunged after the release of dismal U.S. nonfarm payrolls data dampened optimism over the strength of the economy and lowered expectations for a summer rate hike by the Federal Reserve.
Prices of the precious metal have been under pressure in recent weeks, falling to a low of $1,199.00 on May 31 as hawkish comments from Fed officials as well as minutes of the Fed's April meeting convinced many analysts and investors that a rate hike in June or July is a real possibility. Gold futures are still up nearly 15% so far this year.
Elsewhere on the Comex, silver futures for July delivery tacked on 2.5 cents, or 0.15%, to trade at $16.39 a troy ounce during morning hours in London, while copper futures inched up 1.8 cents, or 0.85%, to $2.131 a pound.