Gold prices gain in Asia on london Attacks, Qatar diplomatic row

Gold found support in Asia on Monday after a weekend attack in London that killed seven after a van mowed down pedestrians on London Bridge and attackers from the vehicle fanned out and started stabbing people at nearby restaurants and bars and mulled the potential fallout as key Gulf Countries and Egypt snapped diplomatic and commercial ties with Qatar over terrorism support charges.

Gold for June delivery rose 0.19% to $1,282.61 a troy ounce on the Comex division of the New York Mercantile Exchange.

Last week, gold prices rose to their highest level in over than a month on Friday after a disappointing U.S. employment report underlined the case for the Federal Reserve to continue raising rates at a gradual pace.

The U.S. economy added 138,000 jobs last month the Labor Department reported, falling far short of economists’ expectations for 185,000 new jobs.

Figures for March and April were also revised to show that 66,000 fewer jobs were created than expected, indicating that the labor market may be losing momentum.

The unemployment rate ticked down to a 16-year low of 4.3%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.57% to 96.61 late Friday. It was the lowest close since the U.S. presidential election on November 8, which sent the index soaring.

Gold and the dollar typically move in opposite directions, which means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise.

Most analysts still believe the disappointing data will not stop the Federal Reserve from raising interest rates at its meeting later this month.

Traders now see a roughly 88% chance of a Fed rate increase on June 14, down slightly from 89% before the jobs report.

But the slowdown in jobs growth could temper expectations for a pick-up in economic growth in the second quarter after the economy expanded by just 1.2% year-over-year in the first quarter.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

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