Gold on Friday fell from a record as better-than-expected US jobs data signaled that an economic rebound is still making headway. Selling was also exacerbated as traders fixed the London gold price lower and the US dollar curbed the metal’s haven appeal.
US non-farm payrolls rose by 1.76 million last month, beating estimates for a 1.48 million gain, data showed on Friday, while the unemployment rate fell more than expected.
Prices also weakened as the London Bullion Market Association (LBMA) gold price was set about US$14 lower in the afternoon auction, BMO Capital Markets head of metals derivatives trading Tai Wong said.
“Precious metals are taking a breather as the US dollar and interest rates marginally recover in the aftermath of the stronger-than-expected jobs report,” TD Securities strategists, including Bart Melek, said in an e-mailed note on Friday.
Traders set the LBMA gold price at US$2,031.15 an ounce in the afternoon auction.
The volume of selling outstripped buying by about 90,000 ounces, Wong said.
The London fix is used to settle contracts between LBMA members and serves as a benchmark by miners, banks and jewelers around the world to trade and value metal.
Spot gold on Friday fell 1.7 percent to US$2,035 an ounce, but it is still up more than 33 percent this year, putting it on track for the biggest annual gain in more than four decades.
It also posted its ninth weekly gain, rising 3 percent, the longest stretch of weekly gains since 2006 as the COVID-19 pandemic, negative real interest rates and geopolitical risks spark a flight to precious metals.
Holdings in exchange-traded funds backed by the metal are at an all-time high.
Further gains are predicted — Bank of America Corp reiterated its forecast that gold might reach US$3,000 an ounce in 18 months and said it is “feasible” that silver could hit US$35 in next year.
Spot silver on Friday dropped as much as 5.3 percent before settling about 3 percent lower at US$28 an ounce. The price earlier advanced to US$29.8591, the highest since 2013.
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