Gold rises towards $1,425/oz after U.S. payrolls

Gold rose towards $1,425 an ounce on Friday as U.S. February payrolls data supported expectations the Federal Reserve will hold off tightening monetary policy and as unrest in North Africa continued, Reuters reported.
Spot gold was bid at $1,424.70 an ounce at 1435 GMT, against $1,415.59 late in New York on Thursday. U.S. gold futures for April delivery rose $8.80 to $1,425.20.
The U.S. Labor Department said non-farm payrolls increased by 192,000 in February, above market expectations for 185,000 jobs. Data for December and January was revised to show 58,000 more jobs created than previously estimated.
While the numbers beat Reuters forecasts, many in the market had privately expected a still stronger number, leading to initial weakness in equities and the dollar.
'Overall they indicate what Fed Chairman Bernanke already pointed out in his two testimonies this week,' said Peter Fertig, a consultant at Quantitative Commodity Research.
'The economy is improving, growth could surprise on the upside, but the economic recovery is not producing new jobs as it has in the past, given those growth rates.'
'Thus there is no indication from this labour market report that the Fed might think about terminating quantitative easing earlier than scheduled. That will be continued, and that is going to be a supportive factor (for gold),' he said.
The Fed's easy monetary policy, in place since the financial crisis rocked the markets from 2008, has been a major reason for gold's rally to record highs, because it has undermined confidence in paper currencies.
Comments from the European Central Bank on Thursday that stoked expectation euro zone monetary policy would tighten sooner rather than later knocked gold sharply lower.
Gold prices hit a record high at $1,440.10 an ounce on Wednesday as violence flared in Libya after weeks of unrest across the Middle East region. While they have since corrected, unrest in Libya in particular is continuing to support gold.