Gold (COMEX:GCN14) is poised to climb for a second straight day after a private report showed U.S. companies added fewer jobs than forecast in May, boosting demand for the precious metal as a haven investment.
The 179,000 increase in employment was the smallest in four months and followed a 215,000 gain in April that was less than initially estimated, according to the ADP Research Institute. Gold gained 3.5% this year through yesterday amid concern that U.S. economic growth was stalling.
Prices slumped 28% in 2013 on concern that the Federal Reserve would trim stimulus as the labor market improved. Through June 2, the metal fell for six straight sessions, the longest slump since August, as U.S. equities rose to a record.
“The market is reacting to the ADP number,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “The overall sentiment, however, remains very bearish.”
Gold futures for August delivery added 0.3 percent to $1,247.80 an ounce at 9:23 a.m. on the Comex in New York, after touching $1,240.20 yesterday, the lowest since Jan. 31, before rebounding. Trading today was 48% below the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Bullion climbed 70% from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent. The central bank reduced its monthly asset buying to $45 billion in April, the fourth straight $10 billion cut.