Gold prices rebounded on Monday after bottom fishers snapped up nicely-priced positions in the metal and took back losses stemming from Friday''s better-than-expected U.S. employment and consumer sentiment reports.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,233.50 during U.S. afternoon hours, up 0.37%.
Gold prices hit a session low of USD1,224.80 a troy ounce and high of USD1,237.40 a troy ounce.
Gold futures were likely to find support at USD1,211.20 a troy ounce, Friday''s low, and resistance at USD1,243.30, Friday''s high.
The February contract settled down 0.24% at USD1,229.00 a troy ounce on Friday.
Gold fell on Friday after the Department of Labor said the U.S. economy added 203,000 jobs in November, beating expectations for a 180,000 increase and up from a downwardly revised 200,000 rise the previous month.
Also on Friday, data revealed the preliminary Thomson Reuters/University of Michigan consumer sentiment index increased to 82.5 in December from 75.1 the previous month, far surpassing expectations for a 76.0 reading.
Both reports cemented expectations for the Federal Reserve to begin scaling back its USD85 billion in monthly bond purchases in early 2014, which have supported gold prices for over a year by weakening the dollar.
Bargain hunters sent prices back into positive territory on Monday, especially after Federal Reserve Bank of St. Louis President James Bullard said tapering will become increasingly likely as long as the labor market continues to improve.
“A small taper might recognize labor market improvement while still providing the Committee the opportunity to carefully monitor inflation during the first half of 2014,” Bullard said in prepared remarks of his speech.
“Should inflation not return toward target, the Committee could pause tapering at subsequent meetings.”
Gold''s gains were modest, however, as the market has largely priced in Fed tapering some time in early 2014.
Elsewhere on the Comex, silver for March delivery was up 1.02% at USD19.723 a troy ounce, while copper for March delivery was up 0.24% and trading at USD3.256 a pound.
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