Gold made modest gains as better than expected non-farm payroll figures put a dent in the metal’s recovery.
The figures, which reflect the number of new jobs created in the US, showed 223,000 were created in April, compared to the well-below par 123,000 in March.
It reinforced the belief that March’s dip was a one-off rather than a trend, despite being slightly below expectations of 228,000.
In theory, it was bad news for gold as the Federal Reserve has repeatedly said that any decision on whether or not to raise interest rates would be data dependent.
Marcus Bullus of MB Capital believes a rate hike could come sooner rather than later.
"With the US unemployment rate now at its lowest level since May 2008 and rates of job creation rebounding, the first quarter wobble increasingly seems just that - a brief interruption in the US economy's extraordinary run of job generation.
"All of which points towards an economy with sound fundamentals, and opens the door to the Fed hiking interest rates sooner rather than later”.
Should this happen, gold would become less attractive compared to income yielding bonds while boosting the dollar, the metal’s traditional hedge.
Gold was flat at US$1,185, silver gained 1% to US$16.47 and platinum rose almost US$6 to US$1,137.
Source : proactiveinvestors.co.uk
January 11, 2016