Gold hits highest since late April after weaker US jobs data


Gold hit a six-week high on Monday, buoyed by disappointing U.S. jobs data on Friday that
dimmed the prospects for an aggressive run of interest rate increases in the world's biggest economy.

U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum.

Higher interest rates put pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

Spot gold had climbed to its highest level since April 21 adding to the 1.1 percent gain on Friday, before trading near the flatline at $1,279.42 per ounce.

"Gold has got a bit of a lift from payroll numbers from Friday which has carried through to today but there is also support from terrorist events," said ETF Securities commodities strategist
Nitesh Shah, referring to an attack in London at the weekend.

"Gold tends to be the port of call when people are anxious and events like that make people anxious," he said.

British Prime Minister Theresa May was set to resume campaigning on Monday for the national election due in three days.

The vote is expected to be much tighter than previously predicted. "(European elections have) been an underlying supportive factor for some time providing some good safe-haven buying but not enough to spark any panic buying. That's why we think things will be relatively subdued," said ANZ analyst Daniel Hynes.

U.S. gold futures settled $2.50 higher at $1,281.20 an ounce.

The dollar index, which tracks exchange rates against a basket of six major currencies, kept a lid on gains in bullion of 96.654, its weakest since Nov. 9.

In other precious metal markets, palladium hit its strongest level since September 2014 at $844.60 on Monday. UBS analyst Giovanni Staunovo said it was likely that technical factors had
supported palladium in recent days following the break-through of a previous high.

"I am a little bit cautious in the near term and expect setbacks due to elevated speculative positioning and relatively weak car (sales) in the main palladium markets."

Silver hit its strongest since April 26 earlier in the session and traded at $17.57 as of 2:28 p.m. ET. Platinum rose 0.2 percent to $953.90 an ounce.