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Gold gains as market bets Fed stays loose despite solid jobs data

CommoditiesDec 07, 2012 02:15PM ET
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Investing.com - Gold prices rose in afternoon trading on Friday amid sentiment that despite a stronger-than-expected November jobs report, the Federal Reserve will stick with its ultra-loose monetary policies.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 011.% at USD1,703.65 a troy ounce in U.S. trading, up from a session low of USD1,685.75 and down from a high of USD1,706.75 a troy ounce.

Gold futures were likely to test support at USD1,685.75 a troy ounce, the earlier low, and resistance at USD1,708.25, Wednesday's high.

In the U.S. earlier, the Bureau of Labor Statistics reported that the economy added a net 146,000 nonfarm payrolls in November, up from a downwardly revised 138,000 increase during October.

The headline unemployment rate fell to 7.7% in November from 7.9% in October, surpassing market calls for the figure to remain unchanged.

Analysts were expecting the economy to add only 93,000, though Superstorm Sandy inflicted less damage to the broader labor market than anticipated for November.

Despite the strong numbers, market participants went long on the precious metal on sentiment the economy has not strengthened to the point the Federal Reserve will alter its currently very loose monetary policies.

The Fed will address interest rates at a two-day meeting beginning Dec. 11.

Elsewhere in the U.S., the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to a seasonally adjusted 74.5 for December from 82.7 in November.

Analysts had expected the index to fall only slightly to 82.4, which kept expectations for no change in Fed policy alive.

Meanwhile on the Comex, silver for March delivery was down 0.08% and trading at USD33.088 a troy ounce, while copper for March delivery was up 0.52% and trading at USD3.663 a pound.








Gold gains as market bets Fed stays loose despite solid jobs data
 

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