By Tatyana Shumsky
Gold prices rose Wednesday, after disappointing U.S. employment
data reanimated hopes that the Federal Reserve would delay raising
interest rates.
The most actively traded contract, for June delivery, was
recently up $8.60, or 0.7%, at $1,191.80 a troy ounce on the Comex
division of the New York Mercantile Exchange.
Gold prices surged to $1,194 an ounce after a report showed
private payrolls in the U.S. rose by 189,000 jobs in March. This
was below the 225,000 new jobs economists had predicted and
signaled weaker employment growth for March.
Some traders are hoping the lackluster employment data would
push the U.S. central bank to delay raising interest rates, a
policy shift that is widely expected in the second half of 2015.
Gold has benefited from the near-zero interest-rate environment,
which lets the precious metal easily compete with interest-bearing
assets like Treasury bonds.
"The expectation was that they would raise rates as early as
June, and a bad jobs number this month is likely to push that
back," said Bob Haberkorn, a senior commodities broker with RJO
Futures in Chicago.
Gold traders were particularly sensitive to Wednesday's jobs
data, compiled by payroll processor Automatic Data Processing Inc.
and forecasting firm Moody's Analytics, because the market will be
closed Friday, when the U.S. Department of Labor is scheduled to
release its closely watched nonfarm payrolls report.
"With the ADP number being this bad this morning, it's got
people second-guessing Friday's number," Mr. Haberkorn said.
While the two monthly employment reports don't always follow
suit, investors won't have a chance to react to Friday's jobs data
until electronic trading reopens on Sunday.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com
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