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Gold steady above $1,250, but equities rally curbs demand

Source : REUTERS
Last Updated: Mon, Jun 09, 2014 08:13 hrs
Gold

Gold held its ground above $1,250 an ounce on Monday after U.S. jobs data matched expectations, while a rally in stocks curbed the metal's appeal as an investment hedge.

With no major economic data scheduled for Monday, markets were eyeing investment and consumer demand for further cues.

Spot gold edged up 0.1 percent to $1,253.84 an ounce by 0651 GMT. It has stabilized after falling to a four-month low of $1,240.61 early last week.

"Right now, nobody wants to play big on gold because they are all looking at equities," said a precious metals trader. "With consumer demand also weak and the Ukraine situation quiet, there aren't much bids out there for gold."



Asian stocks touched their highest levels in nearly three years on Monday, basking in the glow of a record close on Wall Street after bright U.S. jobs data pointed to improving economic momentum.

Friday data showed that U.S. employment returned to its pre-recession peak in May, with a solid pace of hiring that offered confirmation the economy has snapped back from a winter slump.

Gold, often seen as an investment hedge, has a negative co-relation with equities and the dollar, both of which have been bolstered by the U.S. jobs data.

Hedge funds and money managers cut their bullish bets in gold futures and options in the week to June 3 to their lowest level since mid-January, according to data from the Commodity Futures Trading Commission on Friday.

Among other precious metals, platinum gained for a fourth straight session as investors awaited the outcome of wage negotiations in top producer South Africa.

South Africa's AMCU union and major platinum producers were due to meet on Monday for more talks aimed at ending a crippling five-month strike, with the government threatening to pull out of mediation if a deal is not agreed.

But the union had said last week that its 12,500 rand ($1,200) per month wage demand was "non-negotiable".

Palladium, of which South Africa is the second biggest producer, edged up to trade near August 2011 highs.

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