Gold Caps Biggest Weekly Rally Since January on Fed Rate Bets

PT. Equityworld Futures - Gold capped the biggest weekly rally since mid-January after an unexpected drop in U.S. consumer confidence revived speculation that the Federal Reserve will wait longer before raising interest rates.

Cooling U.S. expansion is a boon to gold because it’s traditionally sought as a haven during times of economic turmoil. A weaker outlook is more likely to push Fed officials to delay tightening, increasing the chances that inflation can rebound. Higher rates also cut bullion’s allure because the metal doesn’t pay interest, unlike competing assets such as new bonds.

Gold futures for June delivery rose less than 0.1 percent to settle at $1,225.30 an ounce at 1:40 p.m. on the Comex in New York. Prices climbed 2.9 percent this week, the most since Jan. 16.

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Gold Holds Gain on Rate Outlook After Jobs Data; Palladium Drops

PT. Equityworld Futures - Gold held an advance as investors gauged the outlook for higher interest rates after data showed that U.S. payrolls increased and unemployment fell while wage gains were limited. Palladium dropped from an eight-week high.

Bullion for immediate delivery added as much as 0.2 percent to $1,190.54 an ounce and was at $1,190.05 at 8:55 a.m. in Singapore, according to Bloomberg generic pricing. The metal rose 0.3 percent on Friday after the Labor Department release to cap the first weekly gain in a month. Gold in Shanghai fell.

Prices are little changed this year as traders assess the probable timing of a U.S. rate increase by parsing data releases for clues on the strength and durability of the recovery. The Federal Reserve is watching the labor market for signs that it can sustain higher borrowing costs before lifting a benchmark rate for the first time since 2006. The Bloomberg Dollar Spot Index fell for the fourth straight week after figures on Friday.

Gold for June delivery traded at $1,189 an ounce on the Comex from $1,188.90 on Friday. Most-active futures climbed 1.2 percent last week, the biggest weekly increase since the period to March 27.

Silver for immediate delivery rose 0.1 percent to $16.4896 an ounce, while platinum was little changed at $1,142.30 an ounce. Palladium declined 0.2 percent to $798 an ounce after rising to $803.61 on Friday, the highest level since March 11.
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China Adds Stimulus With Third Interest-Rate Cut in Six Months

PT. Equityworld Futures - China’s central bank cut interest rates for the third time in six months as it ratchets up support for an economy grappling with a debt overhang and property slump.

The People’s Bank of China will reduce the one-year lending rate 0.25 percentage point to 5.1 percent, and cut the one-year deposit rate by the same amount to 2.25 percent, effective Monday, the central bank said on its website Sunday. In another step to free up interest rates, the central bank will also raise the limit on what banks can pay savers.

Inflation remained subdued and exports and imports both slid in April -- underscoring the economy’s struggle to match Premier Li Keqiang’s 2015 growth target of about 7 percent. With capital flowing abroad and local governments embroiled in a complex debt cleanup, economists anticipate further easing.

The latest interest-rate reduction adds to China’s own steps and that of at least 30 countries that have loosened monetary policy this year as lower commodity prices give room to stimulate. It also illustrates a divergence of policy direction between the world’s two biggest economies, with analysts forecasting the U.S. Federal Reserve will lift borrowing costs later this year for the first time since 2006.
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Gold Futures Fall Amid Signs of Easing Tensions on Greek Bailout

PT. Equityworld Futures - Gold declined for the third time in four sessions as signs of easing tensions between Greece and its creditors reduced demand for the metal as a haven.

Euro-area finance ministers welcomed progress Greece has made on meeting terms of its bailout while demanding more work before funds can be released, according to two officials. Finance chiefs gathering in Brussels will issue a statement to endorse Greece’s work on a plan to mend its economy, the officials said. Speculation that an aid deal would remain elusive boosted bullion earlier Monday.

Last week, gold rallied on mounting concern that Greece will stumble in its bid to avoid default. Prices also rose last week after a report showing limited wage gains amid increased U.S. hiring indicated the Federal Reserve can take its time in raising interest rates. Higher rates curb gold’s appeal because the metal generally offers returns only through price gains.

Gold futures for June delivery slid 0.5 percent to settle at $1,183 an ounce at 1:48 p.m. on the Comex in New York. The metal climbed 1.2 percent last week.

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