Gold prices ticked lower Friday, amid a small rally in the dollar and ahead of U.S. jobs data which could provide cues on interest rates.
The precious metal fell 0.3% to $1,318.11 a troy ounce in midmorning trade in London.
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Copper prices also ticked down, consolidating the recent sharp gains, with the three-month London Metal Exchange contract falling 0.10% to $6,808 a metric ton.
The price of gold was lower because of a slight resurgence in the dollar after several weeks of weakness, said Carsten Menke, a commodity research analyst at Julius Baer.
That dollar rebound came as stronger-than-expected U.S. jobs and gross domestic figures on Wednesday lifted the bullish sentiment on the country's economic growth.
The WSJ Dollar Index, which measures the greenback against a basket of other currencies, on Friday morning was up 0.10% at 85.81.
Also adding to the dollar's upward movement were receding geopolitical tensions between the U.S. and North Korea.
Fresh expectations for a lift in the U.S. debt ceiling weighed on gold, Mr. Menke said. "If consensus grows that the U.S. is going to raise the debt ceiling because the country needs money to pay out to the hurricane [Harvey] victims, support for gold could fall," he said.
Looking ahead, investors were awaiting U.S. nonfarm payrolls, due out Friday, often viewed as a bellwether for future Federal Reserve interest rates policy.
"If it [the report] contains any surprises, this will probably also influence the gold price via the exchange rate," Commerzbank said in a morning note.
Gold is highly sensitive to interest rates, as higher rates tend to boost the dollar and make gold less competitive against yield-bearing assets like Treasurys.
Among other precious metals, palladium prices fell 0.19% to $934.75 a troy ounce, platinum fell 0.2% to $995.50 a troy ounce and silver fell 0.57% to $17.51 a troy ounce.
Among base metals, zinc fell 0.03% to $3,158 a metric ton, aluminum rose 0.66% to $2,142 a metric ton, tin rose 0.48% to $20,750 a metric ton, nickel rose 1.44% to $11,965 a metric ton and lead fell 0.52% to $2,387.50 a metric ton.
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Gold prices rose Friday after the latest monthly U.S. jobs report came in weaker than economists expected.
Gold for December delivery closed up 0.6% at $1,330.40 a troy ounce on the Comex division of the New York Mercantile Exchange, its highest close since September 2016. The precious metal had its best week since February, supported by geopolitical tensions and growing doubts about the Federal Reserve raising rates for a third time in 2017.
Data released Friday showed the U.S. economy created 156,000 jobs in August, less than expected, while the unemployment rate ticked up to 4.4%. The weaker-than-expected report supported gold because many investors and analysts think soft economic data might make the Fed be more accommodative with monetary policy.
"The way the gold market is interpreting this is we're increasingly thinking that the Fed may not go another time in 2017," said Bart Melek, head of commodity strategy at TD Securities in Toronto.
A longer period without rate increases buoys gold because the precious metal struggles to compete with yield-bearing assets like Treasurys when borrowing costs rise. Division among Fed officials about when to raise rates has been one of the factors pushing gold prices to their highest level of the year in recent weeks.
The dollar edged lower immediately after Friday's report, which also supported metals prices. A weaker dollar makes gold cheaper for foreign buyers.
The WSJ Dollar Index, which tracks the U.S. currency against 16 others, pared earlier losses and was recently up 0.1%.
Among base metals, copper for December delivery closed up 0.6% at $3.1180 a pound. The industrial metal sits at nearly three-year highs after a summer surge, with confidence in the global economy supporting prices in recent weeks.
Copper has risen in eight straight weeks, its longest such streak since May 2006.
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(END) Dow Jones Newswires
September 01, 2017 15:21 ET (19:21 GMT)