Jobs Data Send Gold To Worst Week In A Year

A"pretty darn strong" U.S. employment report is pretty darn bad for gold.

Bullion posted the biggest weekly drop in a year after payrolls surged and wage growth accelerated in October, boosting the case for the Federal Reserve to raise interest rates. Higher rates cut the appeal of the metal because it doesn't pay interest or give returns like assets such as bonds or equities.

Gold had a third straight weekly loss as signs of resilient U.S. growth increase the chances that Fed officials will tighten monetary policy soon. Fed Chairwoman Janet Yellen said in a congressional hearing last week that a move on rates in December is a "live possibility" if economic data hold up. The dollar jumped after the payrolls report.

"The Fed is determined to move, and now they have fuel to do it," said Mike McGlone, director of research at ETF Securities U.S. in New York. "That number was pretty darn strong, and there's not much we can do about it. Higher yields, a strong dollar and Fed tightening are all bad for gold."

Gold futures for December delivery fell 1.5% to settle at $1,087.70 an ounce at 1:30 P.M. on the Comex in New York. Prices slid 4.7% for the week, the biggest such loss since Oct. 31, 2014.

The addition of 271,000 jobs exceeded all estimates in a Bloomberg survey of economists. The median forecast called for a 185,000 advance. Average hourly earnings climbed from a year earlier by the most since July 2009, the government report showed Friday.

Source: http://news.investors.com/investing-futures/110615-779640-jobs-data-send-gold-to-worst-week-in-a-year.htm