SINGAPORE: Gold inched up on Monday off the previous session's four-month, boosted by lacklustre US jobs data which supported expectations for continued monetary easing from the Federal Reserve. The unemployment rate remained at a lofty 7.8 per cent in December, even though US employers kept their pace of hiring steady, suggesting fragile improvement in the labour market. Gold dropped to $1,625.79 on Friday, its lowest since August, after minutes from the Fed's last meeting showed officials were increasingly concerned about the impact of quantitative easing on financial markets. The prospect of a possible suspension of monetary easing spooked gold investors who had expected the central bank to keep pumping cash into the market - a key driver behind the metal's twelfth year of gains in 2012. "There is still hope for gold," said a Sydney-based trader. "I'm much less sanguine about the state of the US economy, as some of the leading indicators are suggestive of a slowdown in US payrolls growth and a stalling in the drop in the unemployment rate." The Fed will have to maintain its monetary stimulus as a result, he said, helping gold remain attractive to investors worried about that rampant cash printing by the central bank could debase paper money and fuel inflation. Spot gold had inched up $1.45 to $1,657.90 an ounce by 0728 GMT, after falling for two sessions straight and ending last week little changed. US gold gained 0.6 per cent to $1,658.60. Technical analysis was less upbeat. Spot gold could revisit last Friday's low of $1,625.79 during the day, as indicated by its wave pattern and a Fibonacci ratio analysis, said Reuters market analyst Wang Tao. "We think gold still has a chance of breaking above $1,800 and even reach $1,900 in the first half of the year due to fragile economic recovery in the United States and easing policies by central banks," said Li Ning, an analyst at Shanghai CIFCO Futures. But prices may weaken in the second half if the global economy gets on a steady path to recovery and stimulus measures taper off, she added. For now, strong physical buying in India, China and Southeast Asia also helped underpin prices. Hedge funds and money managers increased the size of their net longs in gold futures and options in the week to Dec. 31, ending two weeks of declines, Commodity Futures Trading Commission data showed on Friday. Elsewhere, sales of US American Eagle gold coins in 2012 were the weakest in five years despite a strong finish, hurt by declining price volatility, dealers said.

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