Gold gains as market preps for ECB rate cut, lackluster U.S. jobs report

                   Gold prices rose on Monday amid expectations for the European Central Bank to trim interest rates this week, while expectations for a modest increase in the number of nonfarm payrolls in the U.S. also bolstered the yellow metal's appeal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,315.00 during U.S. afternoon hours, up 0.14%.

Gold prices hit a session low of USD1,311.00 a troy ounce and high of USD1,322.10 a troy ounce.

Gold futures were likely to find support at USD1,305.80 a troy ounce, Friday's low, and resistance at USD1,361.70, last Monday's high.

The December contract settled down 0.79% at USD1,313.20 a troy ounce on Friday.

Sluggish inflation rates, elevated unemployment numbers and soft data elsewhere in the euro zone have many convinced the European Central Bank will trim interest rates at a policy meeting this week, which sparked demand for gold as a hedge to a weaker euro.

Solid data hitting the wire earlier capped gold's advance somewhat by giving the single currency some support.

The euro zone manufacturing purchasing managers’ index ticked up to 51.3 in October from a final reading of 51.1 in September, unchanged from a preliminary estimate and in line with market forecasts, according to London-based Markit Economics.

Germany’s manufacturing PMI rose to 51.7 last month from 51.5 in September as new orders and production levels rose.

Analysts were expecting the figure to remain unchanged at 51.5.

Meanwhile in the U.S., date released earlier revealed that U.S. factory orders rose 1.7% in October from September, in line with expectations.

The dollar traded lower, however, as investors weighed possible market reactions to the release of the October U.S. jobs report due out on Friday.

Markets were expecting modest increases in the number of new nonfarm payrolls added in October, which would likely convince the Federal Reserve to leave stimulus programs unchanged until 2014.

Stimulus measures such as the Fed's USD85 billion monthly bond-purchasing program weaken the dollar to spur recovery, making gold an attractive hedge.

Elsewhere on the Comex, silver for December delivery was down 0.75% at USD21.673 a troy ounce, while copper for December delivery was down 1.29% and trading at USD3.256 a pound. -
investing.com -