GOLD FALLS ON US JOBS DATA

GOLD SLID more than 2 percent yesterday as better than expected US employment and service-sector data propelled the dollar higher and boosted expectations that the strong economic readings may reignite taper talk from the US Federal Reserve.

Bullion’s retreat also spilled into other precious metals with silver and platinum prices shedding more than 3 percent.

Spot gold was down 1.8 percent at $1 873.17 (about R25 592) an ounce by 4.35pm, after falling to its lowest level since May 20 at $1 864.39. US gold futures shed 1.9 percent to $1 873.20.

“We’re coming out of the woods here, the data is getting better, there are some inflation issues that could put a damper on things, but we have turned the corner,” Bob Haberkorn, senior market strategist at RJO Futures, said.

“The better than expected data has put traders on the defense, they’re preparing for possible statements from the Federal Reserve on tapering or higher rates although not immediately.”

The dollar index jumped 0.6 percent, making gold expensive for other currency holders, while the US yields also ticked up.

Signalling a strong labour market recovery, new US jobless claims dropped below 400 000 last week, while private employers stepped up hiring in May, the ADP National Employment Report showed.

Meanwhile, a measure of US services industry activity increased to a record high in May.

Focus now turns to key US nonfarm payroll numbers due today.

Silver retreated 3.5 percent to $27.22 an ounce, platinum slipped 3.3 percent to $1 150.50 after sinking to its lowest level since late March, while palladium shed 1.3 percent to $2 818.92.