Gold held below $1,200 per ounce on Monday, as U.S. employment data that beat estimates strengthened the dollar to a more than five-year high, denting bullion’s appeal as a hedge. And supported the case for higher borrowing costs in the world’s largest economy.
Spot gold remained stable at $ 1,192.55 an ounce, after losing 1.1 percent on Friday as data showed US employers added the largest number of workers in almost three years during November and increases wage collected.
The dollar traded near its highest level since March 2009 on the back of strong employment report
Gold futures for February delivery were at $ 1192.10 an ounce on the Comex in New York from $ 1190.40 on December 5, when prices fell 1.4 percent.
Bullion Investors worried that the fortress of the economy might point out the Fed closer to raise interest rates and reduce gold demand, a non-interest bearing asset.
The prices of gold tend to drop in tandem with oil as the lowest energy prices is perceived to reduced inflationary pressures. Bullion is seen as a hedge against-up prices.
In oil prices fell on Monday at close to their lowest levels since 2009 on fears of oversupply, with more declines expected by analysts.
For now, some market participants say that gold could hold nearly $ 1,190 in levels of recent data on the positioning of investors.
Indian rupee falls in early trade on dollar demand, fresh demand for the American unit from importers also weighed on the rupee.
Gold is showing mild gains in the domestic market as a weaker rupee. With marginal gains of 0.1 per cent on MCX gold is trading around Rs 26, 400.
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