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Gold 'big casualty' after US jobs data; drops to one-week low
[SINGAPORE] Gold held its decline to the lowest level in a week after Friday's US jobs report showed strength in the labor market, raising bets that the Federal Reserve may continue to tighten this year.
Bullion for immediate delivery fell as much as 0.3 per cent to US$1,331.59 an ounce and was at US$1,336.58 at 9:24 am in Singapore, according to Bloomberg generic pricing. The metal lost 1.9 per cent on Friday, the biggest drop since May 9.
US payrolls climbed by 255,000, exceeding all forecasts in a Bloomberg survey of 89 economists, following a 292,000 gain in June. The jobless rate held at 4.9 per cent as many of the people streaming into the workforce found jobs.
The probability of the Fed raising rates in December climbed to 47 per cent, from 37 per cent on Aug 4, Fed-fund futures data compiled by Bloomberg show.
"Gold was the big casualty from the strong jobs data," analysts at Australia & New Zealand Banking Group Ltd said in a note.
"The case for a Fed hike was bolstered, but the market is not getting too gung-ho."