NEW YORK/LONDON: Gold hit a five-month high on Friday after US jobs data dampened expectations that the US
Federal Reserve will raise interest rates, but the metal gave up most gains as the dollar rose and safe haven demand ebbed.
US employers added the fewest number of workers in 10 months in March, boosting gold, which is most attractive to investors in a low interest rate environment.
Spot gold rose 0.2 per cent to $1,253.71 an ounce by 2:44 pm EDT (1844 GMT )after touching its highest since Nov 10 at $1,270.46, putting it on track for a fourth consecutive week of gains.
US gold futures climbed 0.3 per cent to settle at $1,257.30 an ounce.
Gold was also underpinned by investors looking for safety after the United States fired cruise missiles at a Syrian air base, escalating tensions with Russia and Iran.
Later in the session, however, safe haven demand faded and the dollar index climbed to three-week highs.
“Unless you can make a case that the geopolitical risk continues to escalate, I’m struggling with this positive sentiment in the gold market,” said Rob Haworth, Senior Investment Strategist for US Bank Wealth Management in Seattle.
“The one factor that’s in favour for gold is that you had pretty negative sentiment coming into the year, so there is room for speculators to increase their bullish positions.”
Investors were cautious ahead of the meeting between US President Donald Trump and Chinese President Xi Jinping, but Trump said on Friday he had made progress in talks and expected them to overcome many problems.
From a technical perspective, Gold has struggled to break above its 200-day moving average in previous sessions but broke out above that key technical level intra-day and has tested its upper resistance at $1,264, the February 28 high.
MKS PAMP analyst Tim Brown said if gold consolidated above $1,260 it could be a catalyst for a push higher.
Russia said relations between Washington and Moscow had been seriously damaged by the strike, which was in retaliation for a deadly chemical attack in Syria. — Reuters
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