Gold Struggles Near 2-1/2 week low on US jobs data

 

Spot gold dropped 0.3 percent to USD 1,118.73 an ounce by 0040 GMT. The metal had fallen to USD 1,116.75 on Friday, the lowest since Aug. 19, posting a second straight weekly loss.

Gold extended losses into a fourth straight session on Monday, struggling near a 2-1/2-week low after US payrolls data failed to provide clarity on the timing of a Federal Reserve rate hike.

Spot gold dropped 0.3 percent to USD 1,118.73 an ounce by 0040 GMT. The metal had fallen to USD 1,116.75 on Friday, the lowest since Aug. 19, posting a second straight weekly loss.

US gold also slid 0.3 percent to USD 1,118.30.

Liquidity is likely to be thin on Monday as the US markets are closed for the Labor Day holiday.

Bullion had come under pressure on Friday after data showed nonfarm payrolls increased 173,000 last month after an upwardly revised gain of 245,000 in July, and the jobless rate dropped to a 7-1/2-year low.

The jobs count, however, may have been tarnished by a statistical fluke that has often led to sharp upward revisions to payroll figures for August after initial weak readings.

The keenly watched jobs report failed to allay uncertainty over the timing of a Federal Reserve rate hike, a factor that has been weighing on gold prices for a while.

Investors had been awaiting the jobs report to gauge the strength of the economic recovery and whether it would prompt the US central bank to hike rates at its policy meet later this month. The Fed has already indicated that the timing of a hike is largely data-dependent.

Hedge funds and money managers added slightly to their bullish position in COMEX gold contracts in the week ended Sept. 1, as prices reversed losses on signs of Chinese economic weakness, US Commodity Futures Trading Commission data showed on Friday.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.04 percent to 682.35 tonnes on Friday.

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