Gold wavers after a recent gain of more than 2% – MarketWatch

Gold futures switched between gains and losses Monday as traders continued to mull the impact of last week’s disappointing monthly U.S. jobs report and the likelihood that the Federal Reserve will continue to delay a hike in interest rates.

Gold futures for December delivery

GCZ5, -0.33%

 was down $1.70, or 0.2%, to $1,134.90 an ounce on Comex after tapping highs above $1,141 early in the session.

December silver

SIZ5, +1.81%

 picked up 39.7 cents, or 2.6%, to $15.66 an ounce, looking to finish higher after a 5.2% rally Friday.

The U.S. dollar

DXY, +0.24%

has likely “priced in interest-rate liftoff and an aggressive rate-hike program for several months now,” Colin Cieszynski, chief market strategist at CMC Markets told MarketWatch.

And “it increasingly looks like liftoff could be delayed,” he said. “Even if the Fed goes ahead with one increase, a second is likely a long way off. This means that [the U.S. dollar] is likely overvalued and is starting to roll over, which could benefit a number of other currencies,” particularly gold.”

Gold jumped 2.1% on Friday after the monthly jobs report showed that the U.S. economy added 142,000 jobs in September, falling short of economists’ estimate of 200,000. The reading shook the confidence of stock-market bulls, undermining the assumption that the Fed could move to raise interest rates before the end of the year.

Ultraloose interest rates for longer are good news for gold because the metal doesn’t offer interest. A delay in normalizing monetary policy also can sap the strength of the U.S. dollar, making dollar-denominated commodities more attractive to buyers using other currencies.

Mark O’Byrne, research director at GoldCore in Dublin, said gold appears to have “bottomed in the summer.”

He said he’s “constructive on the price into year end” and believes gold could go as high as $1,300 per ounce by the end of this year. Longer term, he expects gold to “double in price and surpass its inflation adjusted high of $2,500 per ounce in the next 3 to 5 years.”

Still, despite gold’s recent gains, some analysts foresee headwinds for the commodity. “Lack of inflation, emerging financial stability in Europe, and robust economic activity in the U.S. are all bearish for gold. Expect further downside, if the miners start to hedge,” Morgan Stanley’s commodity research group said in a Monday note.

Data Monday, however, showed that a measure of the services side of the U.S. economy slowed in September to a below-forecast reading that was the lowest in three months.

Over in China, which is among the world’s top buyers of gold, equities climbed on Monday on the back of bets that Beijing will take steps to accelerate economic growth.

In other metals, January platinum

PLF6, +0.20%

 added $14, or 1.5%, to trade at $923.50 an ounce, while December palladium

PAZ5, -1.04%

 gained $10.65, or 1.5%, at $708.25 an ounce.

December high-grade copper

HGZ5, +1.27%

 picked up 4.3 cents, or 1.8%, to stand at $2.368 a pound. On Monday, Glencore PLC’s Chief Executive Ivan Glassberg said he believes copper prices will ultimately rise as the Swiss mining giant takes 400,000 tons out of the market by shutting down two copper mines.