London - Gold prices eased on Monday, surrendering some of the gains made in the previous session after disappointing US jobs data, on expectations the Federal Reserve is still likely to press on with some tapering of monetary stimulus.
Speculation that the US central bank is set to trim its $85 billion monthly bond-buying programme, a key driver of higher bullion prices, has helped knock gold 17 percent lower this year after more than a decade of gains.
Spot gold was down 0.2 percent at $1,388.53 an ounce at 15:55 SA time, while US gold futures for December delivery were up $1.30 an ounce at $1,387.80.
Prices rose 1.7 percent on Friday after a report showing US nonfarm payrolls grew less than expected last month cast doubt on the US recovery. The unemployment rate, the Fed's favoured measure of job market health, eased 0.1 point, however.
“The much-awaited US August jobs report provided little insight into the Fed's policy decision on September 17-18,” Andrey Kryuchenkov, an analyst at VTB Capital, said. “It can still go either way, and players will choose to play it safe without commiting to fresh longs until then.”
Comments by two Fed officials that suggested stimulus unwinding remained on track helped the dollar recover on Monday to near levels seen before the US jobs numbers.
German government bonds weakened meanwhile, reversing some of the sharp gains made on the below-forecast jobs data, as investors continued to bet on the Fed trimming monetary stimulus at its September meeting.
“The Federal Reserve meeting remains an event risk for gold, and I think there's growing consensus that tapering is going to come eventually,” Credit Suisse's head of commodities research Tobias Merath said.
INDIAN APPETITE
Indian jewellers expect a surge in gold shipments this week after the customs department issued new import guidelines on Wednesday. Previously imported stocks had become stuck at Mumbai airport due to a lack of clarity on rules.
Gold traders are closely watching Indian appetite for gold in the usually peak-demand fourth quarter, after officials in the world's largest gold consumer moved to curb imports in an effort to cut its record current account deficit.
“We should keep an eye on demand from Asia during the festival season,” Peter Fertig, a consultant at Quantitative Commodity Research, said. “Given the measures the central bank has already taken and appeals to sell gold, there is a risk that the physical demand for India may disappoint.”
On the supply side of the market, workers in South Africa's motor and gold industries will return to work this week after strikes that have crippled operations at some of the country's biggest producers were resolved on Sunday.
South Africa's Harmony Gold said operations were back to normal at all its mines after striking miners resumed work during Sunday's night shift.
Silver was down 0.8 percent at $23.64 an ounce, while spot platinum was down 0.3 percent at $1,484.20 an ounce and spot palladium was down 1.1 percent at $689.81 an ounce. - Reuters