May 9, 2016 / 2:11 AM / 4 years ago

PRECIOUS-Gold slips as dollar holds firm after U.S. jobs data

* China adds to gold reserves in April
    * Speculators add to long gold position - CFTC
    * Coming up: Germany Industrial orders for March, 0600 GMT

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, May 9 (Reuters) - Spot gold edged lower on
Monday, but remained supported in the face of a firm dollar as
investors bet a weaker U.S. payroll report would push out the
timing of any rate hike. 
    The U.S. economy added the fewest number of jobs in seven
months in April and Americans dropped out of the labour force,
leaving some economists anticipating only one interest rate hike
this year. But encouraging annual wage growth data helped the
dollar to revive.  
    "Gold held on to a lot of the gains despite the
strengthening dollar - it seems to be well supported," said
analyst Daniel Hynes at ANZ in Sydney. 
    "Investors certainly saw the payroll numbers being a
positive in terms of no rate hike in the shorter term, which
lessened the blow of that stronger currency," he added.  
    Spot gold eased 0.2 percent to $1,286.11 an ounce by
0145 GMT, after hitting a five-month high last week, and is
consolidating within a $1,268-$1,303 trading band. Spot gold
closed little changed last week after a 5 percent jump the week
before.
    U.S. gold slipped half a percent to $1,288.20.
    Helping the dollar rebound, New York Federal Reserve
President William Dudley said two U.S. rate hikes this year were
still a "reasonable expectation." 
    A stronger dollar erodes the purchasing power of buyers
paying with other currencies. 
    "We still expect the price of gold to rise further,
underpinned by demand for inflation hedges as inflationary
pressures continue to build," said Capital Economics in a
research note. 
    Elsewhere, a run of Chinese data this week is expected to
show activity moderated in April after a strong showing in
March. A Reuters poll forecast a small drop in all-important
exports last month. 
    Hedge funds and money managers raised their net long
positions in COMEX gold and copper contracts in the week to May
3, U.S. Commodity Futures Trading Commission data showed on
Friday. 
    China's gold reserves stood at 58.14 million fine troy
ounces at the end of April, up from 57.79 million fine troy
ounces at the end of March, the central bank said. 

 (Reporting by Melanie Burton; Editing by Ed Davies and Richard
Pullin)
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