The gold price settled back in London morning trading after hitting a one-month high on sustained weakness in the dollar that has followed US jobs data released late last week.
Spot gold was last at $1,221.30/1,222.10 per ounce, down $1 on the pre-weekend close but having earlier hit its highest since December 11 at $1,231.30, while silver was up four cents at $16.49/16.54.
The dollar stepped lower after Friday’s US jobs report that sounded several worrying notes despite appearing initially strong.
Although the US added a forecast-beating 252,000 jobs in December, the labour force participation rate edged 0.2 percentage points lower to 62.7 percent in December, while average hourly earnings fell five cents to $24.57 following an increase of six cents in November.
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.
“The outlook for wage gains will be important for the Fed’s decision on when and how fast to exit their current accommodative policy stance,” HSBC’s James Steel said. “The unexpected drop in wages may have eased concerns by bullion investors for an earlier-than-anticipated withdrawal of monetary stimulus by the Fed. Gold prices may now steady in the near term.”
Gold priced in euro terms is currently at 16-month highs at 1,037.50 per ounce on safe-haven buying amid the uneasy environment in the currency bloc.
Further declines in oil now look to be priced in despite the risk posed to sentiment in the commodities sphere. Brent crude oil continued its slide this morning, falling to around $48 a barrel, its lowest since April 2009.
The data calendar today is quiet, with Japan observing a bank holiday and few announcements that pose any risk, with just the labour market index out of the US scheduled.
The platinum group metals are benefitting from car sales data out of China, however. Platinum was last $5 higher at $1,229/1,234 per ounce after hitting a near-one-month high earlier at $1,237.50, while palladium was up $6 at $803/808.
According to figures from the China Association of Automobile Manufacturers, monthly car sales in China exceeded the two-million mark for the first time ever in December. Sales totalled 19.7 million units in the year as a whole, a year-on-year increase of nearly 10 percent.
Chinese car sales will rise a further eight percent this year, the Association estimates.
“Among other reasons, this is due to limits to the numbers of cars allowed to be sold in big cities in a bid to curb air pollution,” Commerzbank said in a note. “Platinum and above all palladium should profit from this nonetheless.”
(Editing by Mark Shaw)
The post Gold price hits one-mth high, euro gold at 16-mth high appeared first on The Bullion Desk.
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