Forexpros – Gold futures pushed higher on Monday, after data on Friday showing an unexpected increase in the U.S. unemployment rate last month fuelled expectations for another round of quantitative easing from the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,610.85 a troy ounce during early U.S. trade, up 0.23%.
Gold futures were likely to test support at USD1,593.45 a troy ounce, Wednesday’s low and near-term resistance at USD1,612.05, Tuesday’s high.
The U.S. Department of Labor said the economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000.
But the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over the possibility of further monetary stimulus from the Federal Reserve.
Gold and the dollar trade inversely, and talk the Fed is considering easing can weaken the greenback and send the yellow metal higher.
The dollar remained supported amid lingering doubts over the effectiveness of a European Central Bank plan to stem the debt crisis in the euro zone.
The ECB indicated last week that it may restart its bond buying program, to help lower Spanish and Italian borrowing costs.
However, ECB head Mario Draghi said any such action was conditional on euro zone governments experiencing difficulty on bond markets applying to the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
Meanwhile, renewed concerns that Spain may yet request a full-scale sovereign bailout kept the yield on the country’s 10-year bonds hovering close to the critical 7% threshold widely seen as unsustainable if a country is to remain solvent.
Elsewhere on the Comex, silver for September delivery was down 0.14% to trade at USD27.750 a troy ounce, while copper for September delivery dipped 0.05% to USD3.366 a pound.
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