Gold near one-week high as investors see Fed delaying rate hike

The gold price surged by almost $40 or over 3% on Friday, at its peak and is trading only slightly weaker at around $1,135 per troy ounce as the new week gets underway.

Streible sees gold rising to $1,200 per troy ounce by the end of the year.

The metal is still largely holding on to Friday’s 2.2 percent jump, the biggest one-day rise since January 15 following data that showed U.S. employers had slammed the brakes on hiring over the last two months. Economists polled by Reuters had expected job growth of 203,000 in September. “The interest rate rise is the mechanism by which the (US jobs data) is being rated but the real issue is whether the United States economy is slowing”, Macquarie analyst Matthew Turner said.

Gold trading is set to follow US interest-rate expectations. After the unemployment number on Friday, silver had more of a favorable bias in the short-term, expecting an interest-rate increase pushback to early 2016. “Gold’s technical outlook continues to improve but we are at a critical level… a break above $1,170 could indicate the selling is over and a break below $1,100 could signal we are going down to $1,000″, Saxo Bank senior manager Ole Hansen said.

The data lifted prices off two-week lows, fuelling concerns that a China-led global economic slowdown is sapping USA economic strength and reinvigorating the moribund bullion market that had been rangebound for months. Turnover in December futures in the half-hour after the release pierced 4.8 million ounces, worth about $US5.5 billion, the highest for a 30-minute period in over a year.

Expectations of lower demand after revelations last month that Volkswagen falsified US vehicle emission tests, which a few believe could affect demand for diesel cars, hit platinum prices. The metal is widely used in auto catalysts, particularly for diesel engines. OnMonday, the metal rose to its highest in two weeks of $15.35.

Compared to its related metal palladium, used in petrol cars, platinum is at its cheapest since February 2002.