Gold bounced sharply higher as the delayed monthly non-farm payrolls came in well below forecast at 148,000, suggesting tapering of the Fed’s monetary policies is still a way off.
Spot gold immediately jumped US$12 to US$1,330 even the rate of unemployment in September dipped to 7.2% from 7.3%.
The prospect of the Fed easing its US$85bn per month bond buying programme has weighed on the gold price all year.
The partial shutdown of the Federal Government and debt ceiling row has seen that possibility shift into the New Year for many economists.
Some even now suggest it will be the end of the second quarter of 2014 before the Fed starts to rein back its bond buying.
Money printing is seen as encouraging inflation and weakening the US currency, things which traditionally have helped demand for gold.
The dollar fell back against a range of currencies on the back of the jobs update.
Meanwhile, reports from India suggest the lack of physical metal to meet demand ahead of the Diwali festival and the traditional marriage season has pushed premium to US$100 per oz, with locals tipping it to reach US$150 per oz.
India’s government has tightened up controls on importing gold in to India with 20% of to be set aside and then re-exported, while import duty has been increased to 10%.
Meanwhile, institutions continued to bail out of exchange traded funds (ETFs), with SPDR Gold Trust, the largest gold-backed ETF, 10.51t lower at 871.72t, its largest daily fall since July. The fund has seen 430 tonnes flow out so far this year.
Elsewhere, silver was back close to US$22.5 while platinum added US$2 to US$1,432.
Major movers
Randgold Resources up 115p at 4,602
Fresnillo up 15p at 993p
Anglo American up 23p at 1,559p