Forexpros – Gold prices rose in Asian trading on Monday after weak machinery data in Japan coupled with poor jobs numbers out of the U.S. refueled talk the Federal Reserve will move to stimulate the U.S. economy via monetary easing tools.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded up 0.14% at USD1,581.15 a troy ounce.
Gold hit a low of USD1,578.05 a troy ounce and a high of USD1,582.15 a troy ounce early during the session.
Gold futures were likely to test support at USD1,576.55 a troy ounce, the low from July 6, and resistance at USD1,600.25, the high from July 1.
Disappointing data continued to hit the wire Monday and fueled talk the Fed will move to jolt the economy via easing measures to stave off further decline.
Easing measures such as large-scale bond buybacks from banks tend to weaken gold’s traditional hedge, the dollar, to spur recovery.
Japan on Monday reported core machinery orders fell 14.8% in May, far worse than market expectations for a decline of 2.4%.
The news sent investors stocking up on yen positions and selling dollars in the process.
The dollar, meanwhile, halted its gains stemming from Friday’s weak U.S. jobs data.
On Friday, the U.S. Bureau of Labor Statistics reported the economy added a net 80,000 nonfarm payrolls in June, below market forecasts for a gain of around 90,000.
April figures were revised to 68,000 from 77,000 nonfarm payrolls, while May’s numbers were revised to 77,000 from 69,000.
The data initially sent investors racing to the dollar as they sold stocks and other higher-yielding currencies that perform poorly amid economic uncertainty.
By Monday, however, talk the Federal Reserve at its Aug. 1 monetary policy meeting will vote to stimulate the economy via easing tools sent gold rising and erasing last week’s losses.
Central banks worldwide have already moved to jolt their economies.
The European Central Bank recently trimmed its benchmark interest rate 25 basis points to 0.75%, while the Bank of England moved to inject GBP50 billion into the economy via stimulus measures.
China has cut interest rates as well.
Elsewhere on the Comex, silver for September delivery was up 0.67% and trading at USD27.100 a troy ounce, while copper for September delivery was up 0.05% and trading at USD3.414 a pound.
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