Gold rose steadily in Friday’s London trading, shrugging off a positive US jobs report that could spur a decision on US interest rates in the next few months.
The spot gold price was last at $1,216.00/1,216.80 per ounce, up $8.80 despite the dollar trading just above nine-year highs against the euro at 1.1829.
According to today’s non-farm employment change data, the US added 252,000 jobs in December and the unemployment rate slipped to 5.6 percent although average hourly earnings slipped.
The continued positivity in the labour market was expected to put downside pressure on gold by raising prospect of higher US interest rates. But concerns about wage deflation ultimately bolstered the gold price in afternoon trading.
“The fall in average hourly earnings was the largest in percentage terms in more than a decade, indicating a deflationary trait, which with the Federal Reserve targeting an inflation rate of 2.0 percent is likely to reduce speculation that rate rises are likely to come sooner than previously expected,” FastMarkets analyst Tom Moore said.
Labour reports over the next several months will take on added significance because the Federal Reserve is on the verge of raising interest rates. The current market consensus is that rates will rise in mid-2015 although this is a moving target that will be dictated by jobs and inflation data.
Prior to the report, gold had been higher amid unconfirmed reports that the ECB is preparing a 500-billion-euro quantitative easing package.
In other data today, the Chinese CPI at 1.5 percent was in line with expectations, although the PPI at -3.3 percent was short of forecast.
The German trade balance fell short at 17.7 billion euros as did industrial production at -0.1 percent. The French trade balance at -3.2 billion euros was better than expected although industrial production disappointed at -0.3 percent.
In the other metals, silver at $16.41/16.46 per ounce was down nine cents, platinum gained $11 to $1,224/1,229 and palladium was $8 higher at $793/798.
(Editing by Mark Shaw)
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