By Peter Nurse
Investing.com - Gold prices pushed higher Monday, rebounding a touch after Friday’s sharp losses on the back of the surprise jump in U.S. employment.
At 9:40 AM ET (1340 GMT), gold futures on New York’s Comex rose 0.5%, to $1,691.05.
Gold futures fell nearly 3% Friday, to below $1,700, the sharpest one day drop in nine weeks after the U.S. Labor Department said in its nonfarm payrolls report that 2.5 million Americans re-entered the workforce in May, confounding expectations for a job loss of 8 million.
Despite these gains, gold remains not far off the lowest levels in more than a month as safe-havens remain offered amid broadly upbeat trading sentiment.
Attention will now turn to the U.S. Federal Reserve’s two-day policy meeting that starts on Tuesday for clues on further stimulus measures and the policy rate.
U.S. authorities have already handed out trillions of dollars in loans, grants, and outright aid to businesses and individuals in recent months because of the Covid-19-triggered economic downturn.
But it may become difficult for the Fed to remain particularly accommodative if, as the latest employment numbers suggest, the economy is already in recovery mode.
“Gold might not get much more support from the Fed, but geopolitical risks, second wave concerns, and an eventually weaker U.S. dollar should keep the longer-term bullish outlook intact,” Ed Moya, an analyst at New York’s OANDA, said.