· Gold fell 1 percent on Friday after better-than-expected U.S. jobs data boosted the beleaguered dollar and potentially cleared the way for the U.S. Federal Reserve to raise interest rates for a third time this year.
· Spot gold was down 0.8 percent at $1,257.66 an ounce by 2:02 p.m. EDT (1802 GMT), after falling 1.1 percent. It was on track to end the week down 0.9 percent following three straight weeks higher.
· U.S. gold futures for December delivery settled down 0.8 percent at $1,264.60.
· U.S. 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 percent target.
· "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."
· "This triggered a sell from safe haven buyers of gold and silver," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.
"Though the U.S. 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 U.S. economy is on a sustainable path of growth is needed to 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 seven-week high at $1,273.90 an ounce.
· In other precious metals, silver fell 2 percent to $16.28 per ounce, having hit a two-week low of $16.17.
Reference: Reuters
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