Gold steady early in Asia after sharp drop last week on U.S. jobs data

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Investing.com - " Gold prices held steady on Monday in early Asian trade, recovering slightly from a sharp drop last week as demand for dollars rose in the wake of a stronger than expected U.S. jobs report.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange traded at USD1,287.50 a troy ounce, down 0.04%, hovering between positive and negative territory. Gold futures for December settled 1.8% down at USD1,284.60 an ounce on Friday, the lowest settlement since USD1,282.30 an ounce on Oct. 16.

The world's top two gold importers, India and China, have not stepped up purchases on price dips recently, apparently waiting on more clarity on U.S. Federal Reserve monetary policy.

The Bureau of Labor Statistics reported earlier that the U.S. economy added 204,000 jobs in October, far surpassing expectations for a 125,000 increase.

The figures fueled market sentiments that the Federal Reserve could announce plans to scale back its USD85 billion in monthly asset purchases possibly as soon as December.

Asset purchases aim to spur recovery by driving down long-term interest rates, weakening the dollar in the process, and talk of their dismantling strengthens the U.S. currency and thus weakens gold.

The better-than-expected October jobs report came a day after official data showed that the U.S. economy grew 2.8% on year in the third quarter, well beyond expectations for 2.0% growth.


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This article appears in: Investing , Forex and Currencies

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