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Gold down after big jobs report

Xinhua, October 8, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday after the release of the U.S. employment report.

The most active gold contract for December delivery fell 1.1 U.S. dollars, or 0.09 percent, to settle at 1,251.9 dollars per ounce.

Gold was kept trading within a tight range and had slight pressure put on it as a report released by the U.S. Department of Labor showed non-farm payrolls at 156,000 and employment moving up one tenth of one percent to 5.0 percent. Private payrolls at at 167,000 and the participation rate has increased by 0.1 percent to 62.9 percent.

Analysts note that the prospect for a U.S. Federal Reserve rate hike was looming large before the release of this report, as investors had guessed that this would be an unexpectedly positive report based on the Institute for Supply Management' s report on Wednesday, and the jobless claims report on Thursday. However now that the report has come in exactly in-line with expectations, traders are unlikely to react strongly to this report.

As a result, investors believe the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 10 percent for the November 2016 meeting, and 66 percent at the December meeting.

The U.S. Dollar Index fell by 0.01 percent to 96.67 as of 1845 GMT, putting pressure on the precious metal. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

U.S. banks will be closed on Monday for Columbus Day, but the markets will remain open, albeit with likely low volume. Traders are looking for several Fed speeches next week, along with the weekly jobless claims report on Thursday and the producer price index and retail sales on Friday.

Silver for December delivery rose 3.5 cents, or 0.2 percent, to close at 17.38 dollars per ounce. Platinum for 2017 January delivery fell 3.7 dollars, or 0.38 percent, to close at 962.6 dollars per ounce. Endit