Investing.com - Gold prices were likely to open higher when trade resumes on Monday, as weaker than expected U.S. employment data prompted investors to push back expectations for a rate hike in the U.S. to the end of the year.
The Labor Department reported that the U.S. economy added 126,000 new jobs in March, less than half of February’s gain and the smallest increase since December 2013. Economists had forecast jobs growth of 245,000 last month.
February’s figure was revised down to 264,000 from 295,000. The unemployment rate remained unchanged at a six-and-a-half year lows of 5.5%, in line with forecasts.
The surprisingly weak report added to concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of the year.
A slowing labor market could prompt the Federal Reserve to reconsider a planned increase in interest rates. Last month, the Fed indicated that the first rate increase could come as soon as June, but added that continued improvement in labor markets would be a key factor it would consider.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies fell 0.95% to 96.84 on Friday morning, while the Dow futures tumbled more than 160 points.
Declines were exacerbated by thin trading conditions due to the Easter holiday weekend. Most markets in Europe were closed and U.S markets traded for shortened hours.
On Thursday, gold futures for June delivery dipped $7.30, or 0.6%, to settle at $1,200.90 a troy ounce. Commodity markets remained closed on Friday for Good Friday.
Futures were likely to find support at $1,168.70, the low from March 20, and resistance at $1,220.40, the high from March 26.
On the week, gold prices picked up 90 cents, or 0.02%, the third straight weekly gain, amid expectations U.S. interest rates will rise at a slower pace than previously thought.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Elsewhere on the Comex, silver futures for May delivery ended Thursday's session at $16.70 a troy ounce. For the week, silver lost 28.9 cents, or 2.16%, halting two straight weeks of gains.
Also in metals trading, copper for May delivery closed at $2.734 a pound on Thursday. Copper slumped 2.6 cents, or 1.23%, on the week, the first weekly loss in four weeks.
In the week ahead, markets outside the U.S. will remain closed on Monday. The U.S. is to release what will be closely watched data on service sector activity on Monday and the Federal Reserve is to publish the minutes of its March meeting on Wednesday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 6
Markets in Australia, New Zealand, China, Europe and the U.K. will remain closed for holidays.
In the U.S., the Institute of Supply Management is to release data on service sector activity.
Tuesday, April 7
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Wednesday, April 8
The Bank of Japan is to announce its benchmark interest rate and publish its rate statement. There will be a closely watched press conference following the rate announcement.
Later Wednesday, the Federal Reserve is to publish the minutes of its March meeting.
Thursday, April 9
The Bank of England is to announce its benchmark interest rate.
Later in the day, the U.S. is to release the weekly report on initial jobless claims.
Friday, April 10
China is to publish figures on both consumer and producer price inflation.
The U.S. is to round up the week with a report on import prices.