Gold prices fall after strong US jobs data
Gold prices have ended lower, after better-than-expected jobs data showed the US recovery may be gaining traction, prompting traders to take profits on the precious metal's recent gains.
Gold for August delivery, the most actively traded contract, on Thursday fell $US10.30, or 0.8 per cent, at $US1,320.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
The US economy added 288,000 jobs in June, while the unemployment rate fell to 6.1 per cent from 6.3 per cent in May, data from the Labor Department showed. Economists polled by The Wall Street Journal had forecast a gain of 215,000 jobs, and for the unemployment rate to remain unchanged.
The positive data spelled trouble for gold's recent rally, which has seen prices rise six per cent from June's lows after the Federal Reserve said it would keep rates at rock-bottom levels for as long as possible. A strong US economy could force the Fed to reconsider its pledge and raise rates sooner than expected, hurting gold, which yields nothing and costs money to hold.
The jobs data "certainly dented the move higher in gold, but it's too early to tell if gains will be reversed," said James Steel, an analyst at HSBC.
"There seems to be an acceptance that underlying physical demand for the metal will improve."
Prices for the precious metal touched the highest level in more than three months on Tuesday, as data showed the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, reported a large increase in its gold holdings.
An upsurge of violence in Iraq and Ukraine have also buoyed the metal, as some traders gravitate to gold in times of economic and political uncertainty, believing it will hold its value as other assets fall.
In other markets, palladium prices hit a new 13-year high, with supplies of the metal depleted after a five-month-long strike by South African miners that ended in June, and auto demand rising around the world. Palladium is mainly used as a component in auto exhaust filters.
Palladium for September delivery closed up $US4.50, or 0.5 per cent, at $US861.90 a troy ounce. Earlier in the session, prices touched $US867.45, the highest level since February 2001.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $US1,317.50; previous PM $US1,326.50
Aug gold $US1,320.60, down $US10.30; Range $US1,309.40-$US1,329
Sep silver $US21.137, down 16.5 cents; Range $US20.820-$US21.230
Oct platinum $US1,507.70, down $US3.80; Range $US1,494.50-$US1,511.30
Sep palladium $US861.90, up $US4.50; Range $US849.10-$US867.45
