Gold hovers near 2-1/2-month high on Fed taper delay hopes

Gold hovers near 2-1/2-month high on Fed taper delay hopes

Shafaq News / Gold prices held steady near a 2-1/2-month peak on Monday after disappointing U.S. jobs data raised hopes the Federal Reserve could wait a bit longer to pare stimulus measures, bolstering bullion's appeal as an inflation hedge.

Spot gold was steady at $1,826.82 per ounce as of 0333 GMT. In the previous session, prices hit their highest since June 16 at $1,833.80.

U.S. gold futures eased 0.2% to $1,829.50.

Gold is being supported by the notion that the Fed will be slower to taper than previously thought, and a weak U.S. dollar, said IG Market analyst Kyle Rodda.

"We are seeing a little bit of resistance at $1,830 emerge."

Labor Department data showed on Friday U.S. nonfarm payrolls increased by 235,000 jobs last month, below economists' expectations, as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections.

Fed Chair Jerome Powell had hinted last month that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases.

Some investors view gold as a hedge against inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Friday's data pushed the dollar index to its lowest level since Aug. 4.

Investors expect the European Central Bank later this week to announce a cut to the pace of its emergency bond purchases from next quarter.

Silver rose 0.1% to $24.72 per ounce. Prices rose 3.4% in the previous session, its biggest one-day percentage gain since early May.

Source: Reuters

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