Gold Holds Advance as Rate Increase Dims After U.S. Jobs Crater
(Bloomberg) - Gold held its gains after a weak U.S. jobs report signaled that the Federal Reserve may delay an interest-rate increase on concerns the economy is faltering. Gold companies’ shares surged.
Bullion for immediate delivery traded at $1,241.73 an ounce at 11:04 a.m. in Singapore from $1,244.20 on Friday when it jumped 2.7 percent, according to Bloomberg generic pricing. The metal rose as traders cut bets that the Fed will tighten monetary policy in June or July.
The U.S. added 38,000 workers in May, the fewest since September 2010, a Labor Department report showed Friday. Odds of a June hike implied by futures trading, which had risen as high as 34 percent last month, tumbled to just 4 percent. Fed Chair Janet Yellen will address the World Affairs Council of
Philadelphia on Monday. A gauge of the dollar fell on Friday to the lowest level since May 11.
“We saw that very poor jobs number come in on Friday and that spooked the market to no end,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “The market was getting quite close to accepting the fact that we’d probably see perhaps a June or July rate rise, but looking at those numbers, there
probably won’t be now until later in the year.”
Newcrest Mining Ltd., Australia’s largest gold producer, climbed as much as 11 percent and headed for the biggest daily increase in almost three years, while Regis Resources Ltd. soared as much as 14 percent.
* Holdings in gold-backed exchange-traded funds added 4.7 metric tons to 1,851.9 tons as of Thursday, the highest level since November 2013, data compiled by Bloomberg show.
* In China, bullion of 99.99 percent purity surged as much as 2.1 percent, the most since March 11, to 262.80 yuan a gram ($1,246.24 an ounce) on the Shanghai Gold Exchange.
* Silver, palladium and platinum prices were all broadly flat.