Gold Rises on Weak NFP Prolonging Low Rate Environment

Gold futures rebounded from an 11-week low after U.S. employers in August added the fewest jobs this year, signaling some pressure on the Federal Reserve to maintain lower interest rates.

The 142,000 advance in payrolls was weaker than the lowest forecast in a Bloomberg survey and followed a revised 212,000 gain in July, figures from the Labor Department showed today. The median survey estimate was for a 230,000 increase.

Through yesterday, gold gained 5.3 percent this year on demand for a haven amid escalating conflicts in the Middle East and Ukraine and signs of a sputtering U.S. economy.

Gold futures for December delivery rose 0.3 percent to $1,270 an ounce at 8:39 a.m. on the Comex in New York. Earlier, the price fell as much as 0.7 percent to $1,258, the lowest for a most-active contract since June 17.

Last year, the metal slumped 28 percent as equities rallied and the Fed slowed the pace of monetary stimulus.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza