Gold futures for June delivery gained 0.1 percent to $1,637 an ounce on the Comex in New York. Prices fell 1.8 percent in the previous four days.
Gold traded modestly higher for most of Friday’s session after a softer-than-forecast rise in U.S. employment during April was construed to mean a slightly increased chance for more Federal Reserve easing and, just as significantly, also cooled worries about how quickly policy-setters eventually might hike interest rates farther in the future whenever an economic recovery gains traction.
The data did not result in a sudden and sharp move, however, with some characterizing the report as somewhat mixed since employment was revised higher for prior months. As of 12:35 p.m. EDT, gold for June delivery was $6.30, or 0.4%, higher at $1,641.10 an ounce on the Comex division of the New York Mercantile Exchange.
Much of the market’s recent focus has been on whether to expect looser monetary policy by the Federal Open Market Committee. Thus, gold has tended to fall when strong data and hawkish Fed comments were construed to mean less chance of a third round of quantitative easing, but to rise on weak data and dovish comments.
The Labor Department reported a gain of 115,000 jobs during April, less than consensus forecasts for around 160,000 to 165,000. At first glance, this would seem to be a story of weak data implying continued dovish policy.
However, gold’s uptick was limited right after the report, and traders at the time characterized the data as mixed due to the back-month revisions. Gains in March payrolls were revised up to 154,000 from the initial 120,000, and the February gain was increased to 259,000 from 240,000. Also, the unemployment rate fell to 8.1% from 8.2%, although this was linked to a smaller labor pool as more people stopped working for work.
Overall, the report was tilted toward economic weakness, which is why equities are under pressure.
The unemployment report has come and gone, the market may be pricing in Greek parliamentary and French presidential elections on Sunday. In France, Francois Hollande leads incumbent Nicolas Sarkozy in the polls. There are market concerns that a Hollande win may mean France is less likely to work closely with Germany on debt issues in peripheral eurozone nations.
The debt crisis is coming to a head very, very rapidly, It’s not going too far to say the spirit of nationalism is growing by leaps and bounds in nearly every European country, And this, may pose a threat to the future of European monetary union.
Since the European debt crisis moved to the forefront in recent years, an escalation has tended to weaken the euro and drag gold lower with it. However, when the crisis has become especially acute, gold has drawn safe-haven demand that enabled it to firm alongside the U.S. dollar.
Gold Prices forecast next week 5/7-11/2012
Gold futures on the Comex in New York increased 4.8 percent to $1,642.10 an ounce this year. Prices gained the previous 11 years and holdings in gold-backed exchange-traded products are about 1.2 percent below the record 2,410.2 tons set March 13, data compiled by Bloomberg show. Fifteen of 28 traders and analysts surveyed by Bloomberg said gold would climb next week and five were neutral.
In the Kitco News Gold Survey, out of 33 participants, 22 responded this week. Of those 22 participants, 10 see prices up, while eight see prices down, and four are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
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