Gold higher on speculation Fed may slow tapering
London (Feb 10) Prices of the precious metal rose during Monday's trading session, spurred by speculation the Federal Reserve (Fed) could slow down tapering of its easing policy following weaker-than-expected US non-farm payrolls on Friday.
Gold futures for April delivery grew for the second straight session, up 0.91% to $1,274.30 per troy ounce as of 9:04am GMT, while silver futures rose 1.09%, trading at $20.155 per ounce at the same time.
Poor jobs data
US non-farm payrolls rose by 113,000 last month, missing estimates of a 180,000 rise, data from the Bureau of Labor Statistics showed on Friday. In the previous month, the number of new employees in the economy rose by 75,000. The unemployment rate dropped from 6.7% to 6.6%, the lowest level since 2008. Since October, the jobless rate has edged down 0.6 percentage points.
The reasoning behind rising metals might be the speculation that a second straight month of a weaker increase in the non-farm payrolls could force the Fed to reconsider the pace of tightening its stimulus at its next meeting due March 18 -19.
Metal drivers
In terms of gauging the central banks next steps, Janet Yellen, who has replaced Ben Bernanke as the Fed chair, is due to speak before Congress on Tuesday, while she will speak before the Senate on Thursday.
Gold holdings in SPDR, the world's largest exchange trade fund by physically holdings, stood at 797.05 tonnes as of Friday. Holdings in SPDR rose 0.5% in the last week, being the first consecutive two-week increase since August. Holdings dropped 41% in the last year.
The dollar index, measuring the strength of the US dollar against six of its major peers, added 0.05% to 80.735 points as of the time of writing.
Chinese buyers came back to the markets after the week-long Lunar New Year holiday. China is likely to have overtaken India as the largest consumer of gold in the last year as its consumption topped 1,000 tonnes for the first time.
Chinese consumers bought as much as 1,176.4 metric tons of gold in the last year, according to the China Gold Association.
Moreover, China produced 428.16 tons last year, the seventh consecutive year as the world's largest gold producer.
(Source: WBP Online)
