U.S. Payroll Data Weighs on Gold Prices

The downward journey for gold prices continued once again during the first week of October. Prices for the shuny yellow metal sank near a two-month low on Friday following lower-than-expected U.S. payrolls data, making for what could be a fourth straight weekly loss. This, as the U.S. dollar rose to its highest in more than seven weeks.

The U.S. Bureau of Labor Statistics said the economy south of the line lost 33,000 jobs last month, marking the first contraction in the labour market since September 2010. Economists had expected a gain of 90,000 jobs.

Gold is facing its longest run of weekly declines this year, hitting a gulch it hasn't seen since Aug. 9, after expectations for another hike in U.S. interest rates drove the dollar and U.S. 10-year Treasury yields sharply higher.

Spot gold was down 0.5% to $1,260.97 U.S. an ounce. U.S. gold futures for December fell 0.8% to $1,263.20.

The metal has retreated nearly 1% this week alone.

Here's a reminder that gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Silver subsided 1.5% at $16.34 U.S. an ounce. Platinum was 0.6% lower at $905.50 U.S. an ounce, and palladium was flat at $938.40 U.S. an ounce.

Palladium maintained its premium over platinum, which it moved into last week for the first time since 2001. The spread between the two reached $28.00 U.S. an ounce on Friday.