NEW YORK – Gold in London rose for a second straight day after US employers added fewer than jobs than forecast, boosting prospects for the Federal Reserve to use additional stimulus measures to spur growth.
"There’s going to be this feeling that the Fed’s minutes that said easing was off the table is not going to pan out," Michael Gayed, the chief investment strategist who helps oversee $150 million at New York-based Pension Partners LLC, said in a telephone interview. "We’re getting the consistent message that stimulus is good for gold."
Bullion for immediate delivery gained 0.4 percent to $1,638.25 an ounce by 10:52 a.m. New York time. Trading on the Comex in New York is closed Friday for “Good Friday”.
Gold futures are likely to rally when trading reopens Monday, as the market has its first chance to react to weaker-than-expected US employment data and the return of Indian jewelers to the global bullion market.
The pace of US job creation slowed in March, surprising markets Friday. The US economy added just 120,000 nonfarm payrolls last month--half the number that the economy added in February, and well below the expected 203,000.
“Today’s number affirms that the economy remains a bit underwhelming in its momentum,” said Mark Luschini, chief investment strategist at financial-services firm Janney Montgomery Scott.
Gold traders must wait until Monday to see how the precious metal, widely considered a haven from economic uncertainty, responds to the disappointing employment news because the Comex floor and Globex electronic trading is shut for Easter.
Gold for April delivery settled down 2.4 percent for the week at $1,628.50 a troy ounce on Comex. The decline came as the minutes of the March 13 meeting of the Federal Reserve’s policy-making committee pushed the pendulum toward a lower chance of quantitative easing, which would stimulate the economy and devalue the US dollar.
“Weaker-than-expected jobs data moves that pendulum back slightly,” and precious metals would benefit from the news, said Dave Meger, director of metals trading at Vision Financial Markets, Chicago-based brokerage. – Agencies