Gold futures extended their earlier losses Friday, under pressure from a rising dollar and falling equities as traders looked past a mixed reading on the U.S. labour market and focused on concern about Europe's unsettled debt crisis.
The U.S. added fewer jobs than expected in October, but hiring in previous months was revised sharply higher. Gold erased some of its earlier losses in the minutes after the report, but later turned lower as traders positioned ahead of a confidence vote in the Greek government, turning to the dollar and dumping growth-sensitive assets.
The most actively traded gold contract, for December delivery, was recently down $10.50 U.S., or 0.5%, at $1,754.60 U.S. a troy ounce on the Comex division of the New York Mercantile Exchange. Futures traded at about $1,754.80 U.S. an ounce before the report.
Gold settled Thursday at a six-week high, and some traders took the opportunity to cash out after those gains on Friday, market participants said.
Others were reluctant to take large positions ahead of Friday's confidence vote in the Greek government after a week of developments in the debt-laden country rattled markets. Risky assets slid early this week as investors feared that a "no" vote on Greek Prime Minister George Papandreou's bailout referendum would place the country at greater risk of defaulting on its debt and sending shock waves through the global financial system.
But Papandreou reversed course, abandoning the plan after European leaders warned that the country could lose its internationally financed backstop if it went through with the vote.
The dollar rose against currencies of major trading partners on Friday after a U.S. Labor Department report showed the U.S. economy added 80,000 jobs in October, short of expectations for a gain of 100,000. But the data for the previous two months were revised higher by a total of 102,000, and the unemployment rate in October fell to 9%, from 9.1%.
Gold has taken cues from moves in the U.S. dollar and growth-sensitive assets recently, shunning its perceived role as a safe-haven that should hold its value when the outlook for other assets was grim.
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