Gold prices declined on Friday as a stronger U.S. dollar and higher yields weighed on the market after U.S. non-farm payrolls beat expectations.
UBS has a three-month price target of $1,300 U.S.. Gold has dwindled in price about 6% since touching a seven-month peak of $1,295.97 U.S. on June 6.
Spot gold edged down 0.2% to $1,221.89 U.S. per ounce. It has dropped 1.6% this week and is set for its biggest weekly fall since the week of May 5.
U.S. gold futures for August delivery are near their low of session of $1,213.70 U.S., the lowest level since March 15 when gold traded as low as $1,196.80 U.S. It is on pace for its fifth consecutive negative week for the first time since December 23.
Moreover, the greenback hit a seven-week high against the yen after the Bank of Japan increased its purchases of government bonds, expanding monetary policy at a time when other major central banks are moving towards tightening.
Dollar-denominated bullion typically loses value when the greenback and U.S. Treasury bond rates rise since the metal does not bear interest.
The better-than-expected June jobs report stateside is a sign of labour market strength that could keep the Federal Reserve on course for a third interest rate rise this year.
