NEW YORK/LONDON: Gold tumbled one per cent last Friday after data showed US job growth accelerated sharply, easing fears of an abrupt economic slowdown and keeping the Federal Reserve on track to continue reducing its monetary stimulus.
Bullion pared some early losses after benchmark 10-year Treasury yields gave back some gains after initially rising to a six-week high. Weaker US equities after early advances also helped lift gold from its lows.
Employers added 175,000 jobs to their payrolls last month up from January’s 129,000 new positions, the Labour Department said. The unemployment rate, however, rose to 6.7 per cent from a five-year low of 6.6 per cent, as US citizens flooded into the labour market to search for work.
“It’s a decent data point but who knows how valid it is because of the weather and so forth,” said Axel Merk, portfolio manager of California-based Merk Funds, which has more than US$400 million in currency mutual fund assets.
“Ultimately, the Fed is not interested in tightening any time soon because Yellen says she doesn’t think inflation is a problem,” which boosts gold’s appeal as a hedge, he said.
Spot gold fell as much as 1.5 per cent to a session low of US$1,329.35 an ounce, and was last trading down one per cent at US$1,337.19.
US COMEX gold futures for April delivery fell US$14 to US$1,337.80 an ounce, with trading volume about 20 per cent above its 30-day average, preliminary Reuters data showed.
The metal, seen as a safe haven, was still on track for a fifth straight week of gains, capitalising on gains made earlier in the week when tensions in Ukraine escalated.
“In the short term, given the better-than-expected data, and provided nothing happens in Ukraine over the weekend, gold could fall below US$1,330,” VTB Capital analyst Andrey Kryuchenkov said.
On Friday, President Vladimir Putin rebuffed a warning from US President Barack Obama over Moscow’s military intervention in Crimea, saying that Russia could not ignore calls for help from Russian speakers in Ukraine.
Palladium up on russia, south africa
Palladium posted its biggest weekly gain in nearly eight months, with a five per cent increase. It was last trading up 17 cents on the day at US$777.47 an ounce, having hit a one-year high of US$781.50 an ounce on Thursday.
Political tensions in top producer Russia and union strikes in second-biggest producer South Africa have triggered fears of supply constraints. — Reuters