Gold Climbs in New York as ADP Jobs Report Spurs Stimulus Bets

Gold futures rose for the second time this week after a private jobs report showed U.S. companies hired fewer workers than projected in May, spurring speculation that the Federal Reserve will keep buying bonds.

The 135,000 increase in employment followed a revised 113,000 gain in April that was smaller than initially estimated, the ADP Research Institute said today. Economists surveyed by Bloomberg expected a May advance of 165,000, the median of 40 forecasts. Gold slid 17 percent this year through yesterday on concern that the Fed would curb stimulus measures that helped bullion cap a 12-year bull run in 2012.

“The ADP numbers are on the weaker side, and the talking heads may again suggest the Fed will hold pat,” Peter Hug, the global trading director Kitco Inc., a precious-metal refiner and research company in Montreal, said in a report. This creates a “bullish tone,” he said.

Gold futures for August delivery gained 0.3 percent to $1,401.50 an ounce at 9:25 a.m. on the Comex in New York. Trading was 28 percent below the 100-day average for this time of day, according to data compiled by Bloomberg.

Prices also rose as global equities declined, boosting the appeal of precious metals as alternative assets. The MSCI All-Country World Index touched a five-week low today.

Today’s jobs report comes as some U.S. policy makers have said they favor easing the central bank’s $85 billion in monthly debt buying. Fed Bank of Kansas City President Esther George, who dissented against record stimulus at every policy meeting this year, urged yesterday to slow the program.

“A bit of risk aversion might help gold,” Marc Ground, a commodity strategist at Standard Bank Plc in Johannesburg, said by telephone, referring to the drop in equities. “The talk lately has been a lot more hawkish from the Fed. The market is a bit nervous.”

Silver futures for July delivery gained 0.4 percent to $22.495 an ounce on the Comex. Through yesterday, prices fell 26 percent this year.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Joe Richter in New York at jrichter1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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