Gold held steady near a five-month peak hit early on Monday, supported by a disappointing U.S. jobs report that fuelled speculation that the Federal Reserve may stop raising interest rates sooner than expected.
Spot gold was up 0.1 percent at $1,248.96 per ounce, as of 0432 GMT, after hitting its highest since July 11 at $1,250.55 earlier in the session. U.S. gold futures rose 0.1 percent to $1,254.2 per ounce.
U.S. non-farm payrolls increased by 155,000 jobs last month, below economists’ median forecast of 200,000 jobs and the wage increase was softer than expected.
Some Fed policymakers have struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy.
Gold tends to gain when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on U.S. yields and the dollar, in which gold is priced.
“There is also some safe-haven demand coming back in gold,” said Argonaut Securities analyst Helen Lau.
The dollar slipped against the yen and the euro, while global stocks extended their slump on worries over slowing growth and fears that a fresh flare-up in tensions between U.S. and China could quash chances of a trade deal.
“A number of tailwinds are in place for it (gold) to move significantly higher during the month including falling U.S. interest rates, a declining or at least a stalling dollar, wobbly U.S. equity markets,” INTL FCStone analyst Edward Meir said in a note.
“Over the course of December, we see prices trading between $1,230-$1,285 per ounce.”
Meanwhile, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.20 percent to 759.73 tonnes on Friday.
Spot gold may rise into a range of $1,258-$1,266 per ounce, as it has broken a resistance at $1,245, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot silver was down 0.2 percent at $14.59 per ounce, while palladium slipped 0.6 percent to $1,217.10.
Platinum fell 0.3 to $787.80 per ounce. Prices had slipped to their lowest level since September 12 to $779 in the previous session.