GO
Loading...

Gold steadies as rally runs out of fuel

AP

Gold settled higher on Monday near an earlier one-month high, with a rally sparked by last week's weak U.S. jobs data running out of steam as analysts predicted the Federal Reserve will continue tapering monetary stimulus.

Prices earlier broke above tough chart resistance to hit $1,255.30, their highest since Dec. 12, as some interpreted Friday's reading of the jobs market as strengthening the case for the Fed to keep interest rates low for longer.

Gold later eased as the market digested the report, and as physical demand in China, now the world's biggest bullion consumer, dropped off after the price rally.

Symbol
Name
Price
 
Change
%Change
Volume
GOLD
---
GOLD/USD
---
SILV/USD
---
SILVER
---
PALL/USD
---
PLAT/USD
---

Spot gold was last up 0.6 percent to $1,254 an ounce, while U.S. gold futures for February delivery ended the trading session $4.20 higher at $1,251.10 an ounce.

The Fed's quantitative easing was a key factor driving gold prices to record highs in recent years. It kept interest rates at rock bottom, cutting the opportunity cost of holding gold, while stoking inflation fears. Expectations that the scheme was coming to an end knocked prices down 28 percent last year, their biggest annual fall in 32 years.

In 2014 so far, gold has been among the best-performing metals, with strong Chinese buying ahead of the Lunar New Year and last week's surprisingly weak jobs data helping drive prices 3.4 percent higher.

For more information on commodities, please click here.