Investing.com - Gold prices extended strong gains to hit a seven-week high on Monday, after disappointing U.S. nonfarm payrolls data prompted investors to push back expectations for a rate hike in the U.S. to the end of the year.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery touched an intraday peak of $1,223.40 a troy ounce, the most since February 17, before trading at $1,219.30 during U.S. morning hours, up $18.40, or 1.53%.
Futures were likely to find support at $1,178.20, the low from March 31, and resistance at $1,236.70, the high from February 16.
There was no settlement in gold futures on Friday as markets were closed for the start of the Easter holiday. Trading activity is expected to remain light on Monday, with markets in Europe, the U.K. and China all closed for holidays.
The Labor Department reported Friday that the U.S. economy added just 126,000 new jobs in March, the smallest increase since December 2013 and sharply below forecasts for a gain of 245,000.
The disappointing report makes it more likely that the Federal Reserve will wait until the end of the year to raise interest rates from record low levels. Market players had previously speculated that U.S. interest rates could start to rise as early as June.
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.
Gold prices are up nearly 6.5% since hitting a recent low of $1,140.60 on March 17, as indications that the U.S. economy slowed significantly in the first quarter fuelled bets the Fed will hold off on hiking interest rates until late 2015.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.12% to trade at 96.73, not far from a seven-day trough of 96.55 hit on Friday.
Later in the day, the U.S. Institute of Supply Management is to release data on service sector activity as investors look for further indications on the strength of the economy and the future path of monetary policy.
Elsewhere on the Comex, silver futures for May delivery surged 40.2 cents, or 2.41%, to trade at $17.10 a troy ounce, while copper for May delivery tacked on 1.2 cents, or 0.43%, to trade at $2.746 a pound.