Investing.com - Gold futures inched higher on Monday, after weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will start to taper its stimulus program in the coming months.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,313.55 a troy ounce during European morning hours, up 0.25%.
Gold prices held in a tight trading range between USD1,310.75 a troy ounce, the daily low and a session high of USD1,319.85 a troy ounce.
Gold futures were likely to find support at USD1,282.65 a troy ounce, Friday’s low and the weakest level since July 19 and resistance at USD1,330.55, Thursday’s high.
The December contract ended Friday’s session little changed at USD1,310.05 a troy ounce after the Department of Labor said the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists.
June's figure was revised down to 188,000 from a previously reported gain of 195,000.
The unemployment rate ticked down to 7.4% from 7.6% in June, due in part to more people leaving the labor force.
The data came amid growing uncertainty over the future of the U.S. central bank’s stimulus program, after the Fed said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to taper its bond-buying program.
Market players now looked ahead to the Institute for Supply Management's non-manufacturing index later Monday to further gauge the strength of the U.S. economy.
Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.
The precious metal is on track to post a loss of 21% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Elsewhere on the Comex, silver for September delivery rose 0.1% to trade at USD19.93 a troy ounce, while copper for September delivery added 0.1% to trade at USD3.175 a pound.
China’s HSBC Purchasing Managers' Index for the services industry for July released earlier read 51.3, the same reading as June. Readings above 50.0 indicate expansion.
The official government reading for non-manufacturing PMI in July released over the weekend was 54.1 compared with 53.9 in June.
Copper traders now looked ahead to data scheduled later in the week on China’s trade balance as well as a report on inflation and industrial production, amid ongoing concerns over the Asian nation’s economic outlook.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
