Gold settles higher on strength in physical demand Investors look to economic data, strength in physical gold demand

SAN FRANCISCO (MarketWatch) — Gold futures settled higher on Monday, buoyed by continued strength in physical demand.

Copper prices finished almost flat after a nearly 7% rally on Friday.

Gold for June delivery GCM3 +1.75% rose $3.80, or 0.3%, to $1,468 an ounce on the Comex division of the New York Mercantile Exchange.

For gold, the $1,475 level is key, according to Jason Rotman, president of Lido Isle Advisors in Newport Beach, Calif., and so far the metal has been unable to hold above that level.

Gold is likely to gradually find its way lower this week, he said. “Gold might experience even more of a negative hit if U.S. data keep coming out strong.”

The rise in gold prices comes after Friday’s fall of $3.40, or 0.2%, when a better-than-expected U.S. monthly jobs report curbed the precious metal’s safe-haven appeal.

The U.S. economy created 165,000 jobs in April, the Labor Department said Friday, surpassing the 135,000 jobs expected in a MarketWatch poll of analysts.

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Copper gained almost 7% last week.

Upbeat economic data may raise the potential that the U.S. Federal Reserve will curtail quantitative easing, which has benefited gold. QE raises the risk of inflation and gold is seen as a hedge against inflation.

Gold actually showed “surprising resilience” in the face of Friday’s jobs report, said Brien Lundin, editor of Gold Newsletter.

He had expected to see gold fall $20 or more, but the metal, overall, held steady. That’s possibly due to some of the numbers “just under the surface in the report,” he said, with the fall in total hours worked revealing some underlying weakness. “Boiled down, gold’s imminent prospects depend on how the economic data points come in,” said Lundin.

“Signs of another spring-summer swoon will boost gold’s prospects as investors bet on continued or increased QE,” he said. “Indications of economic growth will work in the opposite direction.”