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Gold bounces on weak U.S. jobs report, trims gains

Published 08/02/2013, 11:51 AM
- - Gold prices bounced up after official data revealed the U.S. economy created far fewer jobs in July than expected, though profit takers trimmed gains and flattened prices in mid-morning trading on Friday.

The numbers stoked expectations that the Federal Reserve may put off tapering monetary stimulus programs, such USD85 billion in monthly asset purchases, which weaken the dollar to spur recovery, making gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,311.65 during U.S. afternoon hours, up 0.03%.

The December contract settled down 0.14% at USD1,311.20 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,269.45 a troy ounce, the low from July 17, and resistance at USD1,339.15, Wednesday's high.

The Bureau of Labor Statistics said the U.S. economy added 162,000 jobs in July, missing expectations for an increase of around 189,000.

The report also revealed that the U.S. unemployment rate ticked down to 7.4% in July, from 7.6% the previous month. Analysts had expected the unemployment rate to slip to 7.5% last month.

Still, the numbers dampened expectations for the Federal Reserve to begin tapering its USD85 billion monthly bond-buying program, which has supported gold prices in recent months.

The Fed is due to meet in September to discuss policy, though concerns began to build that monetary authorities may wait until December to begin tapering the stimulus program and let the economy stand on its own, which could support gold prices for longer than once expected.

Elsewhere on the Comex, silver for September delivery was up 1.385% at USD19.888 a troy ounce, while copper for September delivery was up 0.43% and trading at USD3.180 a pound.

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