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Gold firms amid new health concerns for U.S. economy

Published 04/08/2012, 08:41 PM
Updated 04/08/2012, 08:44 PM
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Investing.com - Gold prices rose in Asian trading Monday after weak jobs data out of the U.S. on Friday stirred talk that the Federal Reserve would consider stimulating the economy via quantitative easing, a monetary policy tool that often sends gold's traditional hedge, the dollar, falling amid a liquidity surge.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.87% at USD1,644.25 a troy ounce in thin holiday trading.

Gold futures were likely to test support at USD1613.55 a troy ounce, Wednesday's low, and resistance at USD1,682.65, Tuesday's high.

In the U.S., the Bureau of Labor Statistics reported the economy added a net 120,000 nonfarm payrolls in March, well below the range of most market expectations.

The government revised February’s payrolls to 240,000 from 227,000, but cut January's figure by 9,000 to 275,000.

The numbers rekindled sentiments that the Federal Reserve may consider stimulating the economy by buying bonds from banks, known as quantitative easing, under which the Fed pumps liquidity into the economy in a way that weakens the dollar in exchange for increased job creation.

Inflationary fears often accompany quantitative easing, and talk that the Fed would even consider such a move sent gold rising in Asia on Monday.

Elsewhere on the Comex, silver for May delivery was up 0.46% and trading at USD31.875 a troy ounce, while copper for May delivery was down 0.25% and trading at USD3.788 a pound.





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