Gold Rises as Jobs Data Ends Seven-Year Streak

By Stephanie Yang Features Dow Jones Newswires

Gold prices edged higher Friday, reversing losses as traders assessed mixed employment data and the likelihood of an interest-rate increase by the end of the year.

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Gold for December delivery settled up 0.1% at $1,274.90 a troy ounce on the Comex division of the New York Mercantile Exchange, after trading as low as $1,262.80 earlier in the session.

Prices rose the Labor Department said the number of jobs in the U.S. fell by 33,000 last month, the first monthly decline in nonfarm employment in seven years. The agency said the drop was largely attributable to impacts from Hurricanes Irma and Harvey.

But some positive signals in the jobs report prompted gold to waver between gains and losses throughout the day. The unemployment rate fell by more than expected to 4.2%, the lowest since 2001. Meanwhile, wages rose 2.9% in September compared with a year earlier.

That data further convinced investors that the Federal Reserve will raise interest rates later this year, said Bob Haberkorn, senior market strategist at RJO Futures.

"It's enough for them to raise rates in December," Mr. Haberkorn said. "They always cite inflation and employment data. There hasn't been a lot of signs of inflation. This is a pretty strong indicator that it's coming."

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Gold has been under pressure in recent weeks, as the market increasingly banks on a rise in interest rates by the end of the year. The precious metal pays its holders nothing, and struggles to compete with yield-bearing assets when borrowing costs rise.

According to the CME Group FedWatch Tool, 86.7% of traders expect the Fed to raise rates at the December meeting.

Copper prices also fell on Friday. Futures for December delivery settled down 0.6% at $3.0290 a pound in New York.

Write to Stephanie Yang at stephanie.yang@wsj.com

(END) Dow Jones Newswires

October 06, 2017 16:05 ET (20:05 GMT)