Investing.com - Gold futures traded higher Monday, as Friday’s nonfarm payrolls data revived expectations that the Federal Reserve could introduce new monetary easing measures in the U.S., while expectations of increased demand in top consumers India and China lent further support.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,644.95 a troy ounce during U.S. afternoon trade, climbing 0.92%.
It earlier rose by as much as 1.2% to trade at a two-day high of USD1,649.75 a troy ounce.
Gold futures were likely to find support at USD1,606.05 a troy ounce, the low from January 9 and resistance at USD1,685.25, the high from April 2.
Trading volumes were expected to be thin as markets in the euro zone and in London remained closed due to the Easter holiday.
With no major economic data due Monday, markets remained focused on Friday’s disappointing U.S. employment report.
The U.S. Department of Labor reported nonfarm payrolls rose by a meager 120,000 in March, the lowest since December and well below expectations for a 203,000 increase.
It was the first time since November that hiring failed to top the 200,000 level, renewing concerns over the health of the U.S. economy.
The unemployment rate dropped down to 8.2%, the lowest since January 2009, from 8.3% in February. However, the data showed that the decline stemmed entirely from people dropping out of the labor force.
The surprisingly weak jobs report revived expectations that the Federal Reserve may implement a third round of quantitative easing, which would weaken the dollar and drive gold prices higher.
Quantitative easing has been the main driver in gold’s bull run over the past two years, as it keeps interest rates and borrowing costs low, which makes gold more attractive compared with yield- or dividend-bearing assets such as bonds or stocks.
In other news, prices found further support after gold jewelers in India ended a three-week strike over the weekend. The three-week strike came to an end after India’s Finance Minister Pranab Mukherjee pledged to reconsider newly imposed taxes on the precious metal.
Many Indian jewelry and gold shops have remained closed since March 18 after the country announced increased taxation.
Prices could potentially receive a boost in the coming weeks as one of the nation’s largest Hindu gold-buying festivals of Akshaya Tritiya begins later in April.
Gold's downward spiral in recent weeks was exacerbated by the absence of the world's largest consumer of the metal, India.
India's gold imports for March are expected to total between 15 to 20 metric tons, down from 50 to 60 tons in the same month last year.
Elsewhere on the Comex, silver for May delivery gave back 0.45% to trade at USD31.58 a troy ounce, while copper for May delivery plummeted 2.05% to trade at USD3.720 a pound.