As investors begin the new trading week kicking around prospects for rate relief from the Federal Reserve, gold is holding its own as a safe-haven status on Monday after a big rally last week.
Bullion has traded in London at $704 (U.S.) an ounce, up from $698 late Friday.
“The move has been impressive and we might see some profit taking, but the market is definitely aiming for $720 as the next target,” Frederic Panizzutti, metals analyst at MKS Finance, told Reuters. “We expect the market to remain volatile in the coming days and would not be surprised to see another rally.”
Friday’s shocking U.S. jobs report is keeping pressure on the greenback, making dollar-priced gold cheaper for holders of other currencies.
With little economic data due on Monday, investors will be paying close attention to comments from three Federal Reserve bank presidents and a Fed governor at various speaking engagements on Monday for any hints about what the central bank might do when it meets Sept. 18.
With two hours to go before the opening bell, U.S. stock-index futures are edging higher, indicating stock prices might rebound after a steep drop on Friday. Dow Jones industrial futures are up 18 points to 13,184 and S&P 500 futures are up 1.5 points to 1,461.
In the corporate spotlight, trouble mortgage lender Countrywide Financial Corp. is trading higher in the pre-market after unveiling plans on Friday to cut up to 12,000 jobs.
And private equity firm Kohlberg Kravis Roberts appears willing to make a concession to the banks financing its $26-billion purchase of payments processor First Data Corp., according to a published report.
“If they can get this deal done, it will prove positive for the market,” Arthur Hogan, chief market analyst for Jefferies & Co., told Reuters. “It’s another sign that the window that was slammed shut on leveraged deals several weeks ago is cracking open a little bit.”
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