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Gold falls as investors lock in gains from soft U.S. jobs data

Published 04/07/2014, 02:39 PM
Updated 04/07/2014, 02:41 PM
Gold eases as market looks past bullish U.S. jobs data

Investing.com - Gold prices fell on Monday after investors locked in gains stemming from Friday's less-than-stellar March jobs report and sold the yellow metal for profits.

On the Comex division of the New York Mercantile Exchange, gold for June delivery was down 0.44% at $1,297.70, off a session high of $1,304.40 and up from a low of $1,295.90

The June contract settled up 1.47% at $1,303.50 on Friday.

Gold futures were likely to find support at $1,278.10 a troy ounce, Tuesday's low, and resistance at $1,307.00, Friday's high.

In the U.S. on Friday, the Department of Labor reported that the U.S. economy added 192,000 jobs in March, missing expectations for a 200,000 increase. February's figure was revised up to a 197,000 rise from a previously estimated 175,000 increase, while January's figure rose to 144,000 from 129,000.

The private sector added 192,000 jobs last month, below expectations for a 195,000 rise, while February's figure was revised up to 188,000 jobs added from a previously estimated 162,000 increase.

The report also showed that the U.S. unemployment rate remained unchanged at 6.7% last month compared to expectations for a 6.6% reading.

While not terrible, the jobs report was lackluster enough to prompt investors to rethink the pace at which the Federal Reserve will wind down its stimulus programs.

The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses interest rates to prop up the economy, weakening the dollar as a side effect, which bolsters gold's appeal as a hedge.

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Gold and the dollar trade inversely with one another.

Past and present rounds of quantitative easing have elevated gold prices since 2008.

Friday's data prompted investors to trade on the notion that the U.S. central bank will take its time dismantling its bond-buying program, though by Monday, profit taking wiped out the precious metal's gains.

Elsewhere on the Comex, silver for May delivery was down 0.19% and trading $19.908 a troy ounce, while copper for May delivery was up 0.72% and trading at $3.044 a pound.

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