On Monday gold prices gain in Asia, inspired by physical demand ahead of the main gold buying season in India - festival of light, as well as weddings season.
Comex gold for December delivery traded at $1,268.80 a troy ounce, up 0.12%, after gaining 0.06% to settle at $1,267.30 a troy ounce by close of trade on Friday.
Ahead is the Indian festival of lights, Diwali, as well as is a traditional time for wedding celebrations with gold a common gift on both occasions.
Last week, gold futures bounced off a 12-week low to end mildly higher as investors returned to the market following the release of weaker than expected U.S. non-farm payrolls data for August. In a report, the Department of Labor said that the U.S. economy added 142,000 jobs in August, the lowest amount in eight months and less than the expected increase of 225,000.
The report also showed that the U.S. unemployment rate ticked down to 6.1% last month from 6.2%, but that was mostly due to more people dropping out of the labor force.
The weaker-than-expected jobs report was taken as a sign that the Federal Reserve will not begin raising interest rates anytime soon.
Gold costs money to store and struggles to compete yield-bearing assets when interest rates are on the rise.
In spite of Friday's sufficient gains, Comex gold prices lost 1.56%, or $20.10, on the week, as the U.S. dollar rose to a 13-month peak against a basket of currencies. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
A recent batch of upbeat data strengthened optimism over stability of the U.S. economy and fuelled expectations that the Fed will begin to raise rates sooner than previously thought.
While the U.S. economy continues to gain steam, Fed Chair Janet Yellen has expressed concern over slackness persistent in the labor market.
The nest week, investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for further indications on the strength of the economic recovery and the possible future path of monetary policy.
Also on the Comex, silver for December delivery rose 0.28% to $19.210 a troy ounce. Elsewhere in metals trading, copper for December delivery climbed 0.21% to $3.177 a pound.
