The gold market is uncertain on likely price moves next week, respondents to the S&P Global Platts Gold Sentiment Survey said Friday, as prices jumped close to six-week highs on disappointing US jobs numbers that sent the dollar tumbling in afternoon trade.
The US economy added 138,000 jobs in May, according to the US Labor department Friday, far below expectations of above 180,000.
And although headline unemployment fell to 4.3% from 4.4%, the labor force participation rate, a measure of the broader American workforce, slipped to 62.7% from 62.9%.
The dollar fell sharply following the report, the US Dollar Index slipping as much as 0.45% on the day to a new 6-month low below 96.75 at 1330 GMT.
Gold jumped as much as $10 on the news to $1,275/oz, its highest level since April 24, boosted by the slide in the dollar as well as lower interest rate expectations implied by the poorer-than-expected economic data.
Expectations of a lift in US rates at this month?s Federal Reserve meeting remain above 90%, according to CME Fed Fund Futures Friday, but a mixture of economic data has helped gold climb steadily since the start of May.
The muddied view is reflected in the mixed response to the S&P Global Gold Sentiment Platts survey Friday, participants divided over the direction of gold in the near term.
Overall, respondents expect prices to remain within the range of $1,240-$1,280/oz next week, unchanged on the previous week, but were divided as to the high and lower range.
"On balance the [Indian] Goods and Services Tax, stronger than expected non-farm payrolls data, UK election and the upcoming FOMC meeting pose downside risk for prices," Standard Chartered's Suki Cooper said Friday.
"Unless the Goods and Services Tax is higher than expected, we expect the impact to be short term, and for demand to bounce back ahead of the wedding and festival related buying," Cooper added.
The Indian gold market moved to a sharp discount this week, to as much as $4-5/oz Friday, as consumers deferred purchases ahead of clarification of a new Goods and Services Tax to be decided at the weekend.
In an effort to streamline a complex tax system encompassing over 1,200 commodities across India, sources are expecting a tax rate for gold of between 1% and 5%.
This is in addition to a 10% import duty, but will replace the existing 1% levied already as VAT and excise duty.
Physical demand has been fairly robust in India this year, with many consumers believed to have stocked up before the new tax.
If a high tax rate is imposed, demand is expected to pick up markedly in the period before the new tax rate comes into force July 1.
Physical demand could then fall away in the second half of the year, local dealers have said.
Elsewhere, physical premiums have been reported around $10/oz this week in China, unchanged on the week.
Premiums in Dubai and Turkey also remain unchanged on the week, around flat to $1/oz.
