QUANTITATIVE EASING

A third straight month of disappointing job data clearly suggests that the U.S. labor market conditions are deteriorating again, which economists say will undoubtedly prompt more speculation that a third round of quantitative easing by the U.S. Federal Reserve is coming soon.

U.S. Federal Reserve policymakers kept the door open to a fresh round of monetary stimulus, citing downside risks to a moderately expanding economy, according to minutes for the central bank's April meeting.

The risk of inflation is keeping the Federal Reserve from doing more to support the U.S. economy, even though the threats to price stability are reasonably contained at present, a Fed official said Thursday.

Gold prices retreated towards $1,650 an ounce on Wednesday as the dollar strengthened against the euro, after a downbeat reading of euro zone manufacturing activity contrasted with stronger data from the United States.

Gold touched two-week highs on Tuesday, set for its longest stretch of daily gains in eight months, after a rally in the dollar fizzled out as investor concern escalated over the resilience of the U.S. and euro zone economies.

Asian stock markets ended with gains on Monday as disappointing US economic activity data boosted hopes for further monetary stimulus from the Federal Reserve.

The Bank of Japan said Friday that it is further easing the monetary policy so that the economy could recover from deflation and grow more strongly.

Gold prices rose towards $1,650 an ounce on Thursday after the Federal Reserve opted to keep U.S. interest rates at rock bottom, taking further support from the foreign exchange market as the dollar languished against a basket of major currencies.

The target U.S. interest rate will remain at its current level of 0 to 0.25 percent through late 2014, the Federal Open Market Committee led by Federal Reserve chairman Ben S. Bernanke decided at a meeting Wednesday.

The United Kingdom, Europe's third-largest economy, fell into recession in the first quarter when its gross domestic product fell 0.2 percent, a contraction that followed the fourth-quarter's 0.3 percent decline.

Silver enjoyed a record 2011, as investors turned to physical bars and coins of the precious metal to piggyback a strong year for gold, according to The Silver Institute's World Silver Survey 2012 released on Thursday.

The Federal Reserve is independent but it does not exist in a vacuum, as waning appetite at the central bank for contentious bond purchases suggests.

Gold prices fell in quiet trade on Monday, following crude oil's losses, as worries about Spain's ability to repay its debt and a resurgent euro zone debt crisis extended bullion's loss to a second day.

Gold prices slipped below $1,670 an ounce on Friday, pausing in their biggest one-week rally since late February as the dollar firmed against key currencies, with the euro falling out of favour due to worries over Spain's financial health.

The cost of living in the U.S. increased at a slower pace in March as the rise in energy prices eased, supporting the Federal Reserve’s view that the jump in oil and gas prices is only temporary.

The Fed is also well aware that employment had peaked in each of the past two springs before resuming growth late in the year.

Dudley said strong first-quarter data might have been the result of unseasonably warm weather in much of the United States that pulled forward some economic activity and hiring.

Stocks were set to rise slightly at the open on Thursday after futures pared gains following an unexpected rise in initial jobless claims in the latest week.

The disappointing performance of the U.S. labor market in March shows it is too early to conclude the economy is out of the woods, despite months of encouraging economic data, New York Federal Reserve Bank president William Dudley said on Thursday.

Japan's core machinery orders rose in February against all expectations, indicating that the country’s economy is in the path of recovery in spite of deflationary pressures, a strengthening currency and decreasing foreign demand.

Gold steadied on Tuesday, surrendering earlier gains as a rally sparked by expectations that a sluggish U.S. employment market could fuel further monetary easing ran out of steam in the face of a firming dollar and easing appetite for risk.