Gold prices fell more than 1% on Friday and were set for a weekly decline after a robust U.S. jobs report dampened expectations of a Federal Reserve rate cut next month, weighing on the non-yielding metal.
Spot gold fell 0.7% to $4,047.14 U.S. per ounce in the wee hours of Friday after falling more than 1% earlier in the session. Bullion has dipped 0.5% this week.
U.S. gold futures for December delivery fell 0.4% to $4,044.50 per ounce.
Thursday’s delayed U.S. jobs report offered a mixed view of the labor market, with non-farm payrolls increasing by 119,000 jobs, compared with estimates of 50,000, but the jobless rate hitting a four-year high.
The next jobs report is due only after the Fed’s December meeting, for which traders now see a 33% chance of a rate cut, down from 44% last week.
Gold, a non-yielding asset, tends to do well in low-interest-rate environments.
Meanwhile, physical gold demand across major Asian markets remained weak this week, as volatility in rates deterred potential buyers from making purchases.
However, the fundamentals for gold remained intact and "factors such as slowing economic growth, expensive equity market valuation, geopolitical uncertainty, and diversification away from U.S. assets are likely to sustain robust investment demand and central-bank buying," ANZ said in a note.
