Gold near 11-week low on US jobs report, rate outlook

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Gold was trading near a 11-week low on Monday, retaining losses from a three-day losing streak, as a strong U.S. jobs report boosted expectations for a U.S. interest rate hike in September.

FUNDAMENTALS

  • Spot gold was little changed at $1,171.76 an ounce by 0014 GMT.
  • The metal had fallen to $1,162.35 on Friday, its lowest since March 19, after data showed U.S. job growth accelerated sharply in May and wages picked up. Nonfarm payrolls increased 280,000 last month, the largest gain since December.
  • The report, indicating signs of strong momentum in the U.S. economy, bolstered expectations the Federal Reserve will begin to raise rates in September.
  • The dollar rallied to a 13-year peak against the yen and rose sharply against the euro on Friday after the robust jobs data.
  • Higher U.S. rates could diminish demand for non-interest-paying bullion, while a stronger dollar makes gold more expensive for holders of other currencies and reduces the metal’s safe-haven appeal.
  • SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.17 percent to 708.70 tons on Friday – their lowest since mid January.
  • Hedge funds and money managers cut net long positions in gold and silver during the week ended June 2, U.S. Commodity Futures Trading Commission data showed on Friday.
  • South Africa should review a preferential tax enjoyed by gold producers, a commission set up to look into taxes in Africa’s most advanced economy said in a report.
  • South Africa’s Association of Mineworkers and Construction Union will launch a wildcat strike if its rival union and gold mining companies impose a wage deal on its members, its president said on Sunday.

MARKET NEWS

Benchmark 10-year U.S. Treasury yields posted their steepest weekly jump in nearly two years on Friday after the jobs report.
PRICES AT 0014 GMT
PRICES AT 0014 GMT
COMEX gold and silver contracts show the most active months
Source: http://in.reuters.com

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