Gold bounces up from 17-month low on weak U.S. jobs data

By Arab Finance

Gold rallied 1 percent on Friday, after falling to the lowest in nearly 17 months when weaker-than-expected U.S. jobs data pushed the dollar lower and a move by the Chinese central bank lifted its currency.

Spot gold was up 0.60 percent at $1,214.79 an ounce $1,220.01. Earlier it dropped to $1,204, the lowest since March 15, 2017.

U.S. gold futures settled up 0.3 percent at $1,223.20 an ounce. “I think the move up is temporary here. It was the miss in the jobs number and tells you that the jobs market may not be on easy street. It may be having a bump in the road right now,” said Phillip Streible, senior market strategist at RJO Futures.

The dollar index turned negative after data showed U.S. job growth slowed more than expected in July. Earlier, the dollar had climbed to a two-week high against a basket of major currencies and scaled a 14-month peak versus the Chinese yuan.

China’s offshore yuan also reversed, rising sharply after its central bank acted to curb short selling of the currency. Spot gold, which was on track to close the week down 0.3 percent, its seventh weekly decline in the past eight, may fall toward the next support at $1,194, as it has resumed its downtrend from $1,309.30, according to Reuters technical analyst Wang Tao. “Gold is getting cheap and positioning wise; that should be a reason for bottoming out. The shorts are relatively big,” said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam, adding that speculators will probably want to test the $1,200 level. Weighing on the market was a report by the World Gold Council showing that global demand fell 6 percent in the first half of the year to the lowest for the period since 2009.

“As long as the dollar remains strong we believe another couple of months demand should stay soft and prices should trade rather range-bound,” Julius Baer analyst Carsten Menke said in a note.

Among other precious metals, silver rose 0.7 percent to $15.41 an ounce, but was on track to close the week lower for the eighth straight week.

Platinum climbed 0.8 percent to $828.99 an ounce, set to finish the week up 0.4 percent, its strongest since late-May.

Palladium dipped 0.1 percent to $910.75 an ounce, on track to close the week down 0.8 percent.

This article provided by NewsEdge.