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Gold holds gains after flurry of U.S. jobs data

Published 07/03/2013, 09:12 AM
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Investing.com - Gold futures were higher on Wednesday, holding on to gains following the release of a flurry of U.S. employment data.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,249.45 a troy ounce during U.S. morning hours, up 0.5% on the day.

Comex gold rose by as much as 1.1% earlier in the day to hit a session high of USD1,258.25 a troy ounce.

Gold futures were likely to find support at USD1,180.35 a troy ounce, Friday’s low and a 34-month low and near-term resistance at USD1,276.05, the high from June 26.

Payroll processor ADP said the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.

Separately, the U.S. Department of Labor said of people who filed for unemployment assistance last week fell by 5,000 to a seasonally adjusted 343,000, compared to expectations for a drop of 3,000 to 345,000.

Investors were looking ahead to Friday’s U.S. nonfarm payrolls data, for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.

Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

Meanwhile, the precious metal also drew some safe haven bids as renewed concerns over the handling of financial troubles in peripheral euro zone countries weighed on market sentiment.

The yield on Portugal’s 10-year government bond surged to 8.01%, from 6.539% on Tuesday after the country’s Finance Minister Vitor Gaspar resigned on Monday.

Elsewhere on the Comex, silver for September delivery rose 1.6% to trade at USD19.62 a troy ounce, while copper for September delivery added 0.7% to trade at USD3.166 a pound.

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