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Gold gyrates after jobs report disappoints

Key Points
  • Precious metals sunk after initially rising after U.S. jobs data for October was released.
  • The dollar rose against a basket of currencies.

Gold slid lower on Friday after getting a slight initial boost from worse-than-expected U.S. jobs numbers in October.

Spot gold sunk 0.73 percent to $1,266.36 per ounce at 11:15 a.m. ET. It hit its highest in about two weeks, at $1,284.10, in Thursday's session.

The precious metal was down prior to the news that the U.S. economy added 261,000 jobs in October, below the 310,000 jobs expected. Gold floated upward after the report was initially released.

U.S. gold futures for December delivery fell 0.86 percent to $1,267.10.

The dollar rose against a basket of currencies on Friday as focus shifted to U.S. jobs data, with President Donald Trump's nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair coming as no surprise.

The greenback had slipped on Thursday after Republicans in the U.S. House of Representatives released proposals to overhaul the tax code.

Asian share markets edged higher on Friday as investors gave a guarded reception to the plans for massive U.S. tax cuts, while welcoming the appointment of a centrist at the helm of the Fed.

House GOP tax bill for middle class or corporations?

A holiday in Japan kept volumes light, while investors observed the usual caution ahead of the U.S. payrolls report which is expected to show a big bounce back from September's hurricane-hit result.

"Gold seems to be broadly flat. The announcement of Jerome Powell as the new Fed Chair was broadly in line with expectations," said John Sharma, an economist with National Australia Bank.

Trump's appointment of Powell broke with precedent by denying Janet Yellen a second term but signalling a continuation of her cautious monetary policies.

Spot gold looks neutral in a narrow range of $1,263-$1,281 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

"If the market somehow believes that Powell will not be aggressive in raising interest rates next year, then gold might have possibly bottomed at $1,260 already," said Samson Li, an analyst with Thomson Reuters GFMS.

Gold is highly sensitive to rising U.S. interest rates,which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Meanwhile, holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.4 percent to 846.04 tonnes on Thursday.

In other precious metals, plummeted 1.73 percent to $16.78 an ounce.

fell 1.11 percent to $913 and was down 0.59 percent to $990.10.