Gold spiked down to its lowest in nearly three months on Friday afternoon after the US non-farm payrolls report suggested an economic rebound in the second quarter.
The spot gold price was last at $1,167.50/1,168.30 per ounce, down $8.50 on the previous session’s close – it hit its lowest since March 19 at $1,165.30 minutes after the jobs report was published.
The US created 280,000 new jobs in May, significantly above analysts’ estimates of 222,000.Average hourly earnings also improved, up 0.3 percent against expectations of 0.2 percent, the biggest climb since August 2013. The unemployment rate increased to 5.5 percent, however, which may have offset some of the optimism from the strong jobs number.
“We expect this indication that the US economy is recovering faster than expected to raise speculation that the FOMC will look to raise interest rates earlier,” FastMarkets analyst Tom Moore said.
US indicators have increased in importance while observers seek signs of an economic rebound in the second quarter. The Federal Reserve identified US jobs data as one of the key factors on its decision when to raise interest rates from near zero, where they have been since 2008.
“The precious metals are likely to push lower to retest support levels in light of this data but, with many already around recent lows, we would not be surprised if they continue to find support on downside breaks,” Moore added.
The US 10-year yield surged to its highest this year at 2.42 percent, up nearly five percent. The euro slumped heavily against the dollar to its current level of 1.1090 from session highs of 1.1280
Silver dropped below the $16 mark for the first time since May 1 but has since recovered to $16.03/16.08, down seven cents for the session. The PGMs were less affected – platinum remains below the $1,100 level at $1,092/1,097, down $4, while palladium was $1 lower at $749/754.
(Editing by Mark Shaw)
The post Gold price hits near-3-mth low after US posts huge job gains appeared first on The Bullion Desk.
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