Gold Rises Near a Two-And-Half Month High

Gold prices rose on Monday, hovering around a two-and-a-half-month peak after disappointing US jobs data raised hopes that the Federal Reserve may wait a little longer to scale back its stimulus measures.

Gold spot transactions 0.1 percent to $ 1827.82 an ounce. In the previous session, prices rose to their highest level since June 16 at $1,833.80.

US gold futures fell 0.2 percent to $ 1829.60.

IG analyst Kyle Roda said gold was being supported by the idea that the Fed might pursue a slower pace of stimulus reduction than previously thought, and a weak US dollar.

Labor Department data on Friday revealed that US non-farm payrolls increased by 235,000 jobs last month, well below economists’ expectations of 728,000.

US Federal Reserve Chairman Jerome Powell hinted last month that a strong job recovery was a prerequisite for the bank to begin reducing its asset purchases.

Some investors consider gold a hedge in the face of inflation that may follow stimulus measures, while low-interest rates reduce the opportunity cost of holding the yellow metal, which does not generate returns.

The dollar index is hovering near a one-month low against major peer currencies.

The European Central Bank is due to announce this week that it will reduce the pace of its emergency bond purchases from next quarter.