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Mixed US jobs data bolsters Bullion

By Religare
|

Gold futures ended on a bullish note in the domestic market on Friday as a slowdown in hiring in the US last month weakened the case for a Federal Reserve interest rate hike in September, bolstering the appeal for the yellow metal as a store of value.

American employers added 173,000 jobs in August, the smallest gain in five months, compared to an upwardly revised 245,000 increase in July, and below expectations of a 217,000 rise. The jobless rate, though, fell to the lowest level since April 2008 at 5.1 per cent in August 2015. Meanwhile, wages remained tepid as average hourly earnings climbed 2.2 per cent, year on year and 0.3 per cent on the month in August 2015.

 

Meanwhile, a weaker dollar also boosted the demand for Gold as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus bolstering demand.

Gold may fall today as a top Fed official advocated raising interest rates in the near-term, regardless of the mixed August jobs report. Gold, a non-interest bearing asset becomes less attractive in a rising interest rate scenario.

At the MCX, Gold futures for October 2015 contract closed at Rs 26,532 per 10 gram, up by 0.52 per cent after opening at Rs 26,422, against the previous closing price of Rs 26,394. It touched the intra-day high of Rs 26,683.

Story first published: Monday, September 7, 2015, 12:10 [IST]
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