NEW YORK: Gold prices rose on Friday, recovering from their lowest in nearly three months hit earlier in the session, after disappointing US payrolls data tempered speculation that the Federal Reserve will raise interest rates any time soon.

Spot gold was up 0.4 per cent at $1,266.45 an ounce by 1540 GMT, having earlier risen as high as $1,273.45.

In overnight trade, the metal hit $1,256.90, its lowest since June 11. Gold prices are set to fall 1.5pc for week on economic optimism and as the dollar rallied.

US COMEX gold futures for December delivery were up 70 cents an ounce at $1,267.20. In the main physical gold markets, where demand has been soft in recent months, buying picked up slightly. Asian dealers said premiums in China, the top buyer of gold, rose to $4 to $5 an ounce above spot prices, from $3 in the previous session.

However, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund and a good measure of investor sentiment, said its holdings fell 4.78 tonnes to 785.73 tonnes on Thursday — the biggest one-day drop since April 16.

Published in Dawn, September 6th , 2014