Gold prices rise in Asia after disappointing U.S. job data

Investing.com - Gold futures rose slightly during the Asian trading on Monday after disappointing U.S. nonfarm payrolls data reduced concerns over a further reduction in U.S. monetary stimulus.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose 0.15% on Monday to USD1,248.80 a troy ounce.

Futures were likely to find support at USD1,223.10 a troy ounce, the low from January 9 and resistance at USD1,251.40, the high from December 16. During the last week, the February Comex gold contract added 0.79%, the third consecutive weekly gain.

Meanwhile, silver for March delivery fell 0.02% at USD20.218 a troy ounce. During the last week, the March silver futures inched up 0.44%.

The U.S. economy added 74,000 jobs in December, the Labor Department said on Friday, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.

The unemployment rate fell to a five-year low of 6.7% from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%.

The dismal data cooled expectations that the Fed would cut its stimulus program again this month. The central bank cited a stronger labor market in its decision to taper its asset purchase program by USD10 billion in December to USD75 billion-a-month.

Minutes of the Fed’s December meeting released during the last week showed that officials were keen to stress that further reductions in stimulus were not on a “preset course” and would be undertaken in “measured” steps.

The central bank is scheduled to meet January 28-29 to review the economy and assess policy. Expectations of monetary stimulus tend to benefit gold, as the precious metal is seen as a safe store of value and inflation hedge.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.04% at 80.70.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

The CFTC Commitments of Traders report for the week ending January 7 showed that speculators boosted their net long gold positions by 2,062 contracts to 139,244, while reducing net short positions by 4,602 contracts to 100,357.

During the week, investors will be closely watching U.S. data on retail sales, inflation and consumer sentiment, as well as speeches by two Federal Reserve officials on Tuesday.

Elsewhere on the Comex, copper for March delivery rose 0.37% at USD3.359 a pound.