Gold prices could rise on dismal US payrolls report

Gold prices could rise next week, with 3 April's dismal US jobs data expected to fuel speculation that the Federal Reserve will wait until September to raise rates, boosting the metal's safe-haven status.

The US economy created 126,000 jobs in March, less than half that of February's pace and the smallest gain since December 2013, government data showed on 3 April.

While the jobless rate held at a more than a six-and-a-half year low of 5.5%, the workforce shrank.

But as the markets were closed on 3 April for the Good Friday holiday, market watchers will have to wait until 6pm EDT (1pm BST) on 5 April, when electronic markets open, to see how traders react to the US nonfarm payrolls report.

Bart Melek, head of commodity strategy at TD Securities, in New York, told Kitco News that there were some pre-positioning trades on 1 April, as traders reacted to weaker than expected private payrolls data from the ADP.

Gwen Preston, editor of Resource Maven, told Kitco that alongside macro data, she will be tracking the stock markets and the US dollar to determine the yellow's metal's direction.

Preston added that in the near-term she was positive on gold, and thought prices could push higher by the end of the month.

While HSBC said that, owing to prior data, gold may not get another boost from the US government jobs report, Commerzbank opined that precious metal could make further gains in the short-term on the back of weaker employment figures.

Melek said: "In the short-term we think the biased is to the downside but if we get more weak data then we could easily see gold back to $1,200 an ounce," he said.

Preston said: "I don't see a lot of room for the U.S. dollar to move higher," she said. "I don't see room for US equities to move higher either and I think those are two positives for gold."

Fed rate hike

Millan Mulraine, deputy chief economist at TD Securities told Reuters: "The [nonfarm payrolls] report confirms the emerging narrative of slowing growth momentum seen in the other economic indicators.

"It will weaken the argument for a mid-year [US Fed interest rate] hike."

Sung Won Sohn, an economics professor at California State University Channel Islands, told the news agency: "Now the timing for the [rate] lift-off could be delayed to September or even to December. The June date is not off the table, however, assuming the economy and employment rebound."

Gold stays put

US gold futures for delivery in June finished in neutral territory this week, after two straight weeks of gains.

Spot gold ended the shortened trading week 0.60% lower at $1,200.90.