Gold slips after robust US non-farm jobs data strengthen greenback

NEW YORK/LONDON — Gold fell 1% on Friday after betterthan-expected US jobs data boosted the beleaguered dollar and potentially cleared the way for the US Federal Reserve to raise interest rates for a third time this year.

US employers hired more workers than expected in July and raised their hourly earnings by the most in five months, signs of labor market tightness and offering the Fed some assurance that inflation will gradually rise to its 2% target.

The US dollar, which was wallowing near 15-month lows prior to the figures, rallied after the release, making dollar-priced gold costlier for non-US investors.

“The strong rise in non-farm payrolls together with the drop back in the unemployment rate to a joint 16-year low suggests the Fed will still need to raise rates again later this year, even if inflation remains subdued,” said Simona Gambarini, commodities economist at Capital Economics.

“In the absence of substantial geopolitical risks, we think that Fed tightening will prove too strong a headwind for gold prices this year. We expect the gold price to end the year at $1,150 per ounce.”

Spot gold was down 0.80% at $1,257.66 an ounce by 2:02 p.m. EDT ( 1802 GMT), after falling 1.10%. It was on track to end the week down 0.90% following three straight weeks higher.

US gold futures for December delivery settled down 0.80% at $1,264.60.

“This triggered a sell from safe haven buyers of gold and silver,” said Miguel Perez- Santalla, vicepresident of Heraeus Metal Management in New York. “Though the US dollar’s strength weighs on ( gold and silver), the market is still not convinced that this data does anything to change the Fed’s trajectory.”

More evidence that the US economy is on a sustainable path of growth is needed for the dollar to make a more meaningful comeback, said Fawad Razaqzada, technical analyst for Forex.com.

Limiting steeper losses in gold was escalating political turmoil in Washington which has cooled expectations for growth and inflation, and boosted safe haven assets like the precious metal. On Tuesday, bullion rose to a sevenweek high at $1,273.90 an ounce.

In other precious metals, silver fell 2% to $16.28 per ounce, having hit a two- week low of $ 16.17. Platinum was up 0.10% at $ 961 per ounce, after hitting its highest since late April at $970.10. Palladium dipped 0.60% to $879.45 per ounce. —