New York/London: Gold tumbled nearly 1 per cent on Friday after data showed US job growth accelerated sharply, easing fears of an abrupt economic slowdown and keeping the Federal Reserve on track to continue reducing its monetary stimulus.
Bullion pared some early losses after benchmark 10-year Treasury yields gave back some gains after initially rising to a six-week high. Weaker US equities after early advances also helped lift gold from its lows.
Employers added 175,000 jobs to their payrolls last month up from January’s 129,000 new positions, the Labour Department said.
The unemployment rate, however, rose to 6.7 per cent from a five-year low of 6.6 per cent, as Americans flooded into the labour market to search for work.
“It’s a decent data point but who knows how valid it is because of the weather and so forth,” said Axel Merk, portfolio manager of California-based Merk Funds, which has more than $400 million (Dh1.5 billion) in currency mutual fund assets.
“Ultimately, the Fed is not interested in tightening any time soon because Yellen says she doesn’t think inflation is a problem,” which boosts gold’s appeal as a hedge, he said.
Spot gold fell as much as 1.5 per cent to a session low of $1,329.35 an ounce, and was last trading down 0.9 per cent at $1,338.09 by 3.22pm EST (2022 GMT).
Futures
US COMEX gold futures for April delivery settled down $13.60 at $1,338.20 an ounce, with trading volume about 30 percent above its 30-day average, preliminary Reuters data showed.
The metal, seen as a safe haven, was up 1 per cent for the week to extend its winning streak to five, capitalising on gains made earlier in the week when tensions in Ukraine escalated.
“In the short term, given the better-than-expected data, and provided nothing happens in Ukraine over the weekend, gold could fall below $1,330,” VTB Capital analyst Andrey Kryuchenkov said.
On Friday, President Vladimir Putin rebuffed a warning from US President Barack Obama over Moscow’s military intervention in Crimea, saying that Russia could not ignore calls for help from Russian speakers in Ukraine.
