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Gold futures move further off 2-week low; China, U.S. data in focus

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Shutterstock photo - Gold futures were higher during European morning hours on Monday, moving further off the previous session's two-week low as Friday's U.S. nonfarm payrolls data was reassessed as one that was not enough to change the Federal Reserve's easy monetary policy.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,581.20 a troy ounce during European morning trade, up 0.3% on the day.

Prices rose by as much as 0.4% earlier in the day to hit a session high of USD1,582.30 a troy ounce. On Friday, Comex gold prices fell to USD1,560.60 a troy ounce, the weakest level since February 21.

Gold prices were likely to find support at USD1,554.80 a troy ounce, the low from February 21 and resistance at USD1,602.20, the high from February 28.

Gold prices initially came under pressure after the U.S. Department of Labor said the economy added 236,000 jobs in February, beating expectations for a 160,000 increase.

However, January's figure was revised down to an increase of 119,000 from a previously reported gain of 157,000.

The data also showed that the unemployment rate ticked down to 7.7% from 7.9% in January.

Prices recovered as market analysts noted that the still-high jobless rate will keep the Fed's asset-purchase program in place for the indefinite future.

The central bank previously stated that monetary policy will remain accommodative "at least as long" as the jobless rate remains above 6.5%.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold's bull run, to an end this year.

Meanwhile, investors had their first chance to react to a flurry of economic reports out of China over the weekend.

Official data showed that consumer prices in China rose 3.2% in February from a year earlier, above expectations for a 3% increase and accelerating sharply from a 2% rate of increase in January.

Gold is considered a hedge against inflation risk, as prices tend to keep in step with consumer price increases.

Separate reports showed that industrial production rose 9.9% in February, less than the expected 10.5% increase and following a 10.3% rise the previous month.

From a technical standpoint, the precious metal has traded in a tight range of roughly USD1,560 to USD1,580 a troy ounce since the beginning of March.

Gold's investment appeal has weakened in recent weeks as market players opted for global equities over the precious metal, amid hopes the economic recovery in the U.S. is gaining momentum.

The Dow Jones Industrial Average moved further into unchartered territory Friday following the upbeat jobs data.

Elsewhere on the Comex, silver for May delivery added 0.1% to trade at USD28.97 a troy ounce, while copper for May delivery declined 0.4% to trade at USD3.495 a pound.

Copper prices came under pressure amid concerns about the economic health of China, the world's largest consumer of the industrial metal. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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