Gold falls further from 9-week high after upbeat U.S. data | Reuters - Firstpost
You are here:

Gold falls further from 9-week high after upbeat U.S. data | Reuters

#Economy   #Entertainment   #India   #Middle East   #opinion   #Technology  


NEW YORK/LONDON Gold fell further from an earlier nine-week high but was still on track for its strongest week since August on Friday as stronger-than-expected U.S. payrolls data boosted the dollar and stock markets, shoring up a recovery in equities.

The Labor Department said U.S. job growth surged in December, and revised employment for the prior two months sharply higher, suggesting that a recent manufacturing-led slowdown in economic growth would be temporary.

That surprisingly strong payrolls report initially lifted stocks but they later lost ground. The dollar rose versus the euro.

Spot gold XAU= initially rose to the highest since early November in overnight trade at $1,112 an ounce. It was down 0.9 percent at $1,098.84 an ounce at 2:15 p.m. EST (1915 GMT), breaking a four-day winning streak. U.S. gold futures GCv1 for February delivery settled down 0.9 percent at $1,097.90.

"(These are) very strong numbers, good for the U.S. dollar," said Georgette Boele, analyst at ABN Amro. "The U.S. dollar is the most important negative driver for gold prices, so this will add pressure."

A strong report could be seen as prompting the Federal Reserve to lift interest rates at a faster pace. Rising rates typically weigh on gold, as they lift the opportunity cost of holding non-yielding assets, while boosting the dollar.

"The week provided a good gold rally as stocks were slammed but today (a) 5 percent jobs report added some bears to gold as (the) Fed seems on path with future rate hikes on this news," said George Gero, precious metals strategist for RBC Capital Markets in New York.

Jitters over the Chinese economy had spooked global stock markets earlier this week, sending investors sprinting to safe-haven assets, and pushing gold sharply higher.

"Although we expect further Fed tightening and dollar strength to prove headwinds for gold over the coming year, the price should be supported by safe-haven demand, a pickup in U.S. inflation and strong buying from emerging economies," said Capital Economics in a note.

Investment appetite for bullion showed signs of picking up this week. Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares (GLD), rose 4.2 tonnes on Thursday, data from the fund showed.

Silver XAG= was down 2.6 percent at $13.93 an ounce, while platinum XPT= was up 0.04 percent at $874.15 an ounce. Palladium XPD= was down 0.2 percent at $491.50 an ounce.

Palladium fell below $500 for the first time since September 2010 on Thursday, reaching a low of $481.67. It is set to end the week down 12.5 percent.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Dale Hudson, Elaine Hardcastle and Phil Berlowitz)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Jan 9, 2016 01:45 IST

Comment using Disqus

Show Comments