Gold recovers from drop after strong US jobs report

Key Points
  • Gold prices eroded on Friday following the release of better-than-expected U.S. payrolls data.
  • The economy boasted 313,000 jobs added in February.

Gold prices recovered after sinking on Friday following the release of nonfarm payrolls data that far exceeded expectations.

The economy boasted 313,000 jobs added in February, demolishing the 200,000 figure anticipated by Reuters economists. In spite of concerns that the market is at or even beyond full employment, job growth charged ahead, led by a leap in construction payrolls.

Spot gold was up 0.02 percent at $1,322.06 an ounce by 10:57 a.m. EST, after it dropped nearly 0.7 percent to lows of $1,313.34 following the release of the report. The metal was on track for a third consecutive weekly decline.

U.S. gold futures for April delivery rose 0.1 percent to $1,323 an ounce.

The dollar jumped more than 0.7 percent against the yen and edged up against a basket of currencies, making gold more expensive for buyers using other currencies.

Nonfarm payrolls increase by 313,000 in February

The U.S. dollar had tumbled to 16-month lows against the safe-haven yen late last week as fears of a trade war rattled markets after U.S. President Donald Trump announced his plan for imposing tariffs on imported steel and aluminium.

Trump said he was prepared to meet North Korea's Kim Jong Un in what would be the first face-to-face encounter between the countries' leaders and could mark a breakthrough in a stand-off over the North's nuclear weapons.

"If, with this news, the tension with North Korea is easing, it's something that is, maybe not headwinds, but a mild breeze against gold," said Norbert Rücker, head of commodity research
at Julius Baer in Zurich.

The reaction has been muted because gold had failed to show strong safe-haven demand last year during months of insults exchanged over the North's nuclear and missile programmes, he

Julius Baer expects gold to fall to $1,225 in three months, he added.

In other precious metals, gained 0.64 percent to $16.60 an ounce, rose 0.34 percent to $955.24 and jumped 1.17 percent to $987.50 an ounce.