Gold holds steady as demand expectations rise
Gains are sitting at a tight range and are limited by a recovery in risk appetite
London: Gold held steady near $1,250 (Dh4,590) an ounce in Europe on Monday as expectations for a rise in physical demand going into the fourth quarter supported prices, but with gains limited by a recovery in risk appetite.
Spot gold was bid at $1,249.60 an ounce at 9:32 GMT, against $1,248.04 late on Friday. US gold futures for December delivery firmed 40 cents (Dh1.40) to $1,251.40. Trading is set to be muted during the US Labour Day holiday, analysts said.
Downside
"Gold is sitting in a very tight range," said VTB Capital analyst Andrey Kryuchenkov. "The downside will be limited because of seasonality, with Asian buyers really looking to buy on any dips."
"The upside is capped by the non-farm payrolls," he added. A report showing payrolls declined by a smaller-than-expected number last month knocked gold briefly lower, though prices proved resilient in later trade.
India, the world's biggest consumer of the yellow metal, has recently entered the traditionally strong festival period for bullion consumption, which began with Raksha Bandhan in late August and lasts through November with Dhanteras.
Gold demand in India was solid last Tuesday, dealers reported, after the rupee rose to a two-week high, making dollar-quoted assets cheaper for local buyers.
The dollar edged lower versus the euro yesterday, failing to retain the gains it made last week after better-than-expected US payrolls data eased concerns over chances of a global slowdown.
The data is capping gains in gold as it lifts appetite for other assets, analysts said.
"Good jobs data in the US on Friday night may move some funds towards some ‘risk on' equity investment," Fairfax analyst John Meyer said in a note.
European equities extended the previous session's gains amid optimism after the US jobs data, with world stocks climbing on hopes that a slip back into recession could be avoided.
Optimism
Among other commodities, Copper meanwhile rose to four-month highs as optimism returned to the broader markets following better than forecast US jobs data.
