Gold prices inched lower Friday after closing at their lowest level since July on Thursday, with interest rates still in focus for many investors following the latest U.S. jobs report.
Gold for February delivery declined 0.4% to $1,248.40 a troy ounce on the Comex division of the New York Mercantile Exchange to wrap up its worst week since May. Prices have fallen in six of the past eight sessions and have been weighed down recently by concerns about higher interest rates and a stronger dollar. They are roughly 7.5% off their year-to-date highs from early September.
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Because gold struggles to compete with yield-bearing assets like Treasurys as borrowing costs rise, many analysts have said they expect prices to fall ahead of next week's Federal Reserve meeting before bouncing back slightly.
With a third interest-rate increase of 2017 widely expected next week, investors and analysts said Friday's jobs report would likely have little impact on the Fed's meeting, though it could affect the central bank's outlook for 2018.
Although the report showed U.S. employers hired workers at a strong rate in November and the unemployment rate held at a 17-year low, Chris Gaffney, president of EverBank World Markets, said another month of tepid wage growth could raise doubts about the Fed speeding up its pace of rate increases moving forward.
"I think there's some fuel to the pause camp right now in this report," Mr. Gaffney said. "That should be positive for gold."
Still, some traders were likely still focused on the short-term outlook ahead of next week's Fed meeting, he added.
The dollar was little changed Friday, though its recent gains have also been a headwind for gold by making the dollar-denominated commodity more expensive for overseas buyers. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, rose 0.2% Friday.
Some analysts said the U.K. and the European Union reaching an agreement on Brexit divorce terms after six months of tense talks also was limiting demand for gold and other haven assets by removing a possible source of short-term investor anxiety from the market.
Among base metals, copper for March delivery rose 0.5% to $2.9785 a pound. The industrial metal has fallen back below $3 following its worst day in almost three years earlier this week, with some investors worried that an economic slowdown in China will weigh on prices. China is the world's largest base metals consumer and had outperformed expectations earlier in the year to push copper prices to a three-year high.
Prices are now more than 7% off those levels, though data Friday showed Chinese copper imports hit their highest level of the year in November, Commerzbank analysts said in a note.
Write to Amrith Ramkumar at email@example.com and David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
December 08, 2017 14:59 ET (19:59 GMT)