Gold Falls on Upbeat Jobs Data, Stronger Dollar


". . .the new gold sales cap 'may be keeping a psychological lid on the gold market.'"

Gold futures fell below $960 an ounce Friday, as an upbeat U.S. jobs report reduced the metal's safe-haven appeal and as a stronger dollar curbed the metal's attractiveness as an alternative investment.

Job losses slowed in July to the lowest total since August as the unemployment rate unexpectedly fell back to 9.4%, the Labor Department estimated Friday. The dollar rallied against its major rivals after the jobs data.

Separately, 19 European central banks, led by the European Central Bank, on Friday extended a cap on gold sales for another five years starting from September. The move was widely expected.

On the Comex division of the New York Mercantile Exchange, the front-month August gold contract fell $6.10, or 0.6%, to $954.60 an ounce. Despite the loss, the metal is still set to end the week up slightly. The more active December contract slid $3.0 or 0.3%, to $959.90.

"Gold is down on a strong dollar as market players readjust expectations of which country will raise rates first," said Brian Kelly, chief executive officer of Kanundrum Research, a commodities and macroeconomic research firm.

"The strong U.S. jobs report tilts the odds in favor of the U.S. being one of the first to tighten monetary policy," he added. Meanwhile, the new gold sales cap "may be keeping a psychological lid on the gold market."

In other metals, September copper rose 4.2 cents, or 1.5%, to $2.794 a pound. September silver gained 22 cents, or 1.5%, to $14.865 an ounce. October platinum added $4.10, or 0.3%, to $1,267.50 an ounce, while September palladium rose $3.40, or 1.3%, to $274.50 an ounce.

Holdings of SPDR Gold Trust, the biggest gold exchange-traded fund, remained unchanged at 1,072.87 metric tons Thursday.

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