January 10, 2014 / 11:16 AM / 5 years ago

PRECIOUS-Gold rises 1.5 pct after weak payrolls, posts weekly gain

* U.S. jobs growth weakest in 3 years, more exiting
    * Expected U.S. equities weakness seen underpinning gold
    * Some analysts say gold will only get short-term boost
    * Coming up: US Federal Budget Monday

    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Jan 10 (Reuters) - Gold rose 1.5 percent on
Friday, cementing a third consecutive weekly gain, after
disappointing U.S. jobs data stirred speculation the Federal
Reserve will take a gradual approach to tapering its bond-buying
stimulus this year.
    The dollar fell broadly and the S&P 500 equities index
 was flat after a closely watched Labor Department report
showed U.S. employers in December hired the fewest number of
workers in almost three years.
    U.S. nonfarm payrolls rose just 74,000 in December, the
smallest increase since January 2011, while the unemployment
rate fell 0.3 percentage point to 6.7 percent as more people
left the labor force. 
    Analysts said that falling U.S. labor participation is
likely to prompt the Fed to be cautious in trimming its stimulus
after the central bank opted to cut its bond purchases for the
first time in December.
    In addition, gold could be further underpinned by falling
equities prices following last year's tumble in bullion prices
and stock markets' record run-up, analysts said.
    "As the stock market declines, hedge funds and momentum
traders are taking profits off their equities positions and
rolling them into gold," said Jeffrey Sica, chief investment
officer at New Jersey-based Sica Wealth, which manages more than
$1 billion in client assets.
    Spot gold was up 1.5 percent at $1,245.58 by 2:29
p.m. EST (1929 GMT). 
    For the week, gold was up almost 1 percent, extending its
rise to a third consecutive week, its longest weekly winning
streak since August.
    U.S. Comex gold futures for February delivery settled
up $17.50 at $1,246.90 an ounce, with trading volume about 10
percent below the 250-day average, preliminary Reuters data
    Other analysts, however, said the weaker-than-expected U.S.
jobs data will boost gold prices in the short term only, because
an overall improvement in the U.S. economic outlook and a rising
interest-rate environment will weigh on the metal's price.
    "Gold has been on the firm side this year and this data
helps support that but the effect is being moderated by the fact
that the Fed has begun tapering ... nobody is now thinking the
U.S. economy is near collapsing," Macquarie analyst Matthew
Turner said.
    Silver, meanwhile, rose 2.9 percent to $20.11 an
ounce. Platinum was up 1.1 percent at $1,428.10 an ounce,
while palladium gained 0.8 percent to $739.10 an ounce.
 2:29 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1246.90  17.50   1.4  1226.60 1248.50  147,693
 US Silver MAR  20.223  0.540   2.7   19.545  20.250   47,739
 US Plat APR   1436.90  17.00   1.2  1416.80 1439.00    7,828
 US Pall MAR    746.05   9.55   1.3   735.00  748.40    3,161
 Gold          1245.58  18.04   1.5  1227.70 1248.41         
 Silver         20.110  0.570   2.9   19.580  20.240
 Platinum      1428.10  14.85   1.1  1419.00 1434.00
 Palladium      739.10   5.99   0.8   737.00  744.97
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        170,817   126,447   186,928     18.45   -0.71
 US Silver       53,207    36,755    57,398     26.44   -1.18
 US Platinum      7,899    14,248    12,893     17.89   -0.60
 US Palladium     3,226     3,169     5,857     17.49   -0.81
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