US payrolls data hits gold prices; copper also slumps

London

GOLD prices fell towards a second weekly loss on Friday after US payrolls data failed to allay uncertainty over the prospect of a near-term interest rate hike from the Federal Reserve.

Data from the Labor Department on Friday showed that non-farm payrolls rose 173,000 last month, a slowdown from July's upwardly revised gain of 245,000.

However, a drop in the unemployment rate to a near 7-1/2-year low and an acceleration in wages kept alive prospects of a Federal Reserve interest rate increase later this month.

Spot gold was down 0.4 per cent at US$1,120.80 an ounce at 1346 GMT, while US gold futures for December delivery were down US$4.70 at US$1,119.80.

"Overall I think the payrolls were erring on the better side, even though the headline number was weaker, because of the lower unemployment rate, the higher hourly earnings, and the upward revisions," ABN Amro analyst Georgette Boele said. "The dollar is also doing relatively okay, which i…