Gold Falls on Dollar Strength After U.S. Jobs Report

By Amrith Ramkumar and David Hodari Features Dow Jones Newswires

Gold prices closed at their lowest level in almost three months Friday, with the dollar rising after the latest jobs report.

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Futures for December delivery closed down 0.7% at $1,269.20 a troy ounce on the Comex division of the New York Mercantile Exchange -- the most actively traded gold contract's lowest close since Aug. 8.

Although the Labor Department said the U.S. economy added fewer jobs than expected in October and wage growth slowed, revisions showed the labor market weathered hurricane damage better than previously estimated.

The report is unlikely to change the Federal Reserve's plans to raise interest rates again in December, meaning the outlook for gold was also largely unchanged, said Tai Wong, head of metals trading at BMO Capital Markets. He said he expected gold to continue reacting to moves in other assets such as the dollar, which makes dollar-denominated commodities more expensive to foreign buyers when it rises.

The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, pared earlier losses and was recently up 0.3%. Mr. Wong noted the market also was still digesting President Donald Trump's nomination of Jerome Powell as the next Fed chair and the Republican tax plan along with the jobs report.

"Unless there's a big move in the broader markets, I'm not seeing a big day in gold ahead of us," he said.

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The dollar rebounding in recent weeks and concerns about the Fed's plans to raise rates gradually moving forward have gold trading roughly 5.6% off its year-to-date high from early September. The precious metal struggles to compete with yield-bearing assets when rates rise. Still, for the year, gold prices are up about 10% and have gotten a boost from geopolitical uncertainty.

Among base metals, copper for December delivery fell 0.8% to $3.1175 a pound. Like gold, the industrial metal has largely traded sideways in recent sessions. Still, it sits near three-year highs, boosted by a positive global economic backdrop, strong demand from China -- the world's largest copper consumer -- and the prospect electric vehicles will stoke demand for base metals moving forward.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

November 03, 2017 15:01 ET (19:01 GMT)