Gold claws back from 6-week low, ends shy of $1,294


Gold rose 1 percent on Friday a day after touching a six-week low as U.S. payrolls data missed expectations, dampening talk of an early interest rate rise by the Federal Reserve and pressuring the dollar.

A string of upbeat reports on the U.S. economy, including signs of an improving job market, helped gold to its biggest monthly loss this year in July, with prices falling 1 percent on Thursday.

They clawed back lost ground, however, after data showed U.S. job growth slowed more than expected last month and the unemployment rate rose, pointing to some slack in the labour market that could give the Fed room to keep interest rates low.

That would keep the opportunity cost of holding gold versus higher-yielding assets low.

Spot gold was up 1 percent at $1,294 an ounce, off Thursday's six-week low of $1,280.76. U.S. gold futures for December delivery ended up $12.30 an ounce at $1,293.60.

Chart: Precious Metals

Data released on Friday showed nonfarm payrolls increased 209,000 last month after surging by 298,000 in June, while the unemployment rate edged up to 6.2 percent from 6.1 percent.

The dollar index hit session lows after the numbers, retreating further from the previous day's 10-1/2 month low.

"Gold and the U.S. dollar have a strong historical negative correlation, as bullion is most frequently priced in dollar terms," HSBC said in a note. "Expectations for a stronger dollar may keep a lid on gold prices in the near to medium term."

--By Reuters. For more information on commodities, please click here.