Gold rose from an 11-week low, after U.S. employers added the fewest jobs this year, adding some pressure on the Federal Reserve to maintain lower interest rates.
The 142,000 advance in payrolls last month was weaker than the lowest forecast in a Bloomberg survey, government data showed today. Slowing labor gains come after Fed policy makers had signaled they could raise borrowing costs sooner than they anticipated amid faster job growth.
Gold is heading for the first quarterly loss this year as the outlook for higher interest rates curbed demand for an inflation hedge. Separate reports this week showed gains for U.S. manufacturing and housing.
“Previous data had suggested the economy was gaining traction, but today’s number is a bit of a disappointment, and the Fed may have to maintain lower interest rates,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said. “This is a good number for gold.”
Gold futures for December delivery rose 0.1 percent to close at $1,267.30 an ounce at 1:37 p.m. on the Comex in New York. Earlier, the price fell as much as 0.7 percent to $1,258, the lowest for a most-active contract since June 17.
The metal has gained 5.4 percent this year on demand for a haven amid escalating conflicts in the Middle East and Ukraine.
Bullion jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs at an all-time low to support the economy. Last year, the metal slumped 28 percent as equities rallied and the Fed slowed the pace of monetary stimulus.
Silver futures for December delivery advanced 0.1 percent to $19.156 an ounce on the Comex.
On the New York Mercantile Exchange, palladium futures for December delivery increased 0.1 percent to $891.45 an ounce. Platinum futures for October delivery added 0.2 percent to $1,411 an ounce, after touching $1,403.50, the lowest since April 24.
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