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SINGAPORE. — Gold edged higher yesterday after softer than expected US non-farm payroll data eased fears of an imminent tapering of the Federal Reserve’s stimulus measures. Gold had fallen below US$1 300 last week after strong US gross domestic product and factory activity data that reduced its hedge appeal.
However, it rebounded after data showed the US non-farm sector’s jobs growth grew at the slowest rate in four months.
Spot gold was trading 0,44 percent higher at US$1 317,30 an ounce, while US gold gained about US$6 to US$1 316,90.
“These markets are very much driven in the immediate future by the data that gives us an idea as to when the tapering is going to start taking effect. And gold being very much the most sensitive to that,” Société Générale cross-commodity research strategist Mark Keenan said in Singapore.
Gold, seen as a hedge against inflation, had gained in recent years as the global economy took a hit and central banks acted to boost their economies. Prices touched a record high of US$1 920,30 in 2011.
In recent weeks, the Fed has said it will begin tapering its US$85 billion monthly bond purchases if the US economic recovery retains momentum, prompting investors to closely monitor housing and jobs data.
“The tapering is very much on the horizon. We see it this year,” Mr Keenan said.
Hedge funds and money managers trimmed their gold net longs and raised their bullish position in silver futures and options, a report by the Commodity Futures Trading Commission showed last Friday.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0,26 percent to 918,64 tonnes last Friday touching fresh four-year lows.
“The outlook is bearish for gold, and we expect a test of the major low at US$1 180, to target US$1 156,” ScotiaMocatta analysts wrote in a note. Gold hit a near three-year low of US$1 180 on June 28. — Reuters.
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