Gold futures took a turn lower after switching between gains and losses on the heels of a Friday jobs report that offered a mixed picture of the health of the U.S. labour market.
The U.S. economy in August saw its smallest employment gains in five months, according to the U.S. Labor Department, adding a modest 173,000 new jobs, while unemployment fell to 5.1%—its lowest level since April 2008.
On its face, the data may provide no clear guidance for those hoping to gather insight about the Federal Reserve’s plan for normalizing interest rates.
Although the payrolls rise was lower than economists’ projections, upward revisions to prior months and the lowest unemployment rate in about seven years may offer little cause for the Fed to delay raising rates for the first time in nearly a decade at its two-day policy meeting beginning Sept. 16.
The employment data come shortly after Jeffrey Lacker, president of the Richmond Fed, said the central bank would be willing to lift rates regardless of a weak report.
Immediately after the jobs report, gold turned into positive territory but soon returned to negative territory.
Gold futures for December delivery were lower, losing about $6.50, or 0.6%, to $1,118 U.S. an ounce, after posting a second straight decline in Thursday’s session ahead of the non-farm payrolls report. Gold is on pace for a 1.5% weekly decline.
A strengthening dollar put pressure on gold in Thursday trade after European Central Bank President Mario Draghi signaled the ECB was prepared to expand monetary stimulus if needed to help boost the region’s economy amid worries about a slowdown in emerging markets like China.
Beyond jobs and a stronger dollar, analysts at Nomura believes that weak demand for gold is reining in the metal’s price, which had moved off its recent lows of around $1,085 an ounce, on the back of worries about tough economic times for China’s economy.
In other metals, December silver lost five cents, or 0.4%, to trade at $14.66 U.S. an ounce. Silver is on track for a 0.3% weekly drop.
