Gold gains on Ukraine standoff, soft Chinese data weigh
Published Mar 10, 2014 03:22PM ET
Investing.com - Gold prices edged higher on Monday as the ongoing Russian standoff in Ukraine bolstered the yellow metal's appeal as a hedge, though Friday's strong U.S. jobs report and soft Chinese trade figures watered down gains.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at $1,339.60 a troy ounce during U.S. trading, up 0.10%, up from a session low of $1,328.20 and off a high of $1,344.90.
The April contract settled down 1.01% at $1,338.20 on Friday.
Futures were likely to find support at $1,320.10 a troy ounce, the low from Feb. 28, and resistance at $1,355.00, the high from March 3.
Ongoing geopolitical tensions in Ukraine bolstered gold's appeal as a hedge on Monday.
Russia remained at odds with the West on how to end the standoff in Ukraine, while U.S. Secretary of State John Kerry declined an invitation to visit Russia for further discussions, which boosted gold prices.
Strong U.S. employment numbers and weak Chinese trade figures strengthened the dollar and capped gold's gains, as the two asset classes tend to trade inversely with one another.
The Bureau of Labor Statistics reported Friday that the U.S. economy added 175,000 jobs in February, beating expectations for a 149,000 increase.
January's figure was revised up to 129,000 from 113,000.
The data extended the dollar's gains into Monday, as the Federal Reserve has said it will pay close attention to data when deciding on how quickly it will dismantle its monthly bond-buying program.
Fed bond purchases, currently set at $65 billion a month, soften the dollar by suppressing interest rates to spur recovery by encouraging investing and hiring.
Weak Chinese trade data supported the greenback as well by bolstering its appeal as a safe-haven asset class.
Data released over the weekend showed that Chinese exports fell 18.1% on-year in February, defying expectations for a 6.8% increase, following a rise of 10.6% in January.
A separate report showed that the annual rate of inflation in China slowed to 2.0% in February, from 2.5% in January.
The numbers confirmed market concerns that emerging markets are cooling and sent investors seeking safety in gold.
Meanwhile, silver for May delivery was down 0.55% at US$20.813 a troy ounce, while copper futures for May delivery were down 1.30% at US$3.042 a pound.
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Written By: Investing.com
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