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Gold futures ended Friday’s session at a three-week low, after stronger-than-expected U.S. nonfarm payrolls data fuelled speculation that the Federal Reserve may start tapering stimulus sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery tumbled 1.83% on Friday to settle the week at USD1,284.60 a troy ounce.
Comex gold prices fell to a session low of USD1,280.50 a troy ounce earlier in the day, the weakest level since October 17. The December contract fell 0.71% on Thursday to settle at USD1,308.50 a troy ounce.
Gold futures were likely to find support at USD1,273.80 a troy ounce, the low from October 17 and resistance at USD1,325.70, the high from November 7.
On the week, the precious metal lost 2.17%, the second consecutive weekly decline.
The Department of Labor said the U.S. economy added 204,000 jobs in October, much more than the 125,000 increase forecast by economists. September's figure was revised up to 163,000 from a previously reported 148,000.
The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.
The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.
The U.S. dollar strengthened across the board after the robust data raised the possibility that the Fed may start to scale back its USD85 billion-a-month asset purchase program as soon as next month.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose 0.48% on Friday to settle the week at 81.29, the strongest level since September 13.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Gold prices are down approximately 24% this year on concerns the Fed would begin cutting back its easy-money policy by trimming its USD85-billion monthly bond purchases.
In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve.
Elsewhere on the Comex, silver for December delivery dropped 1.57% on Friday to settle the week at USD21.31 a troy ounce. Comex silver fell to a session low of USD21.25 a troy ounce earlier in the day, the lowest since October 15.
Silver prices settled 0.51% lower at USD21.65 on Thursday. On the week, silver future prices lost 2.38%, the second consecutive decline.
Meanwhile, copper for December delivery inched up 0.17% on Friday to close the week at USD3.254 a pound. On Thursday, copper futures added 0.36% to settle at USD3.248 a pound.
Despite Friday’s modest gains, copper prices still fell 1.33% on the week, amid expectations that the Federal Reserve will begin tapering its stimulus program sooner-than-expected.
Data released over the weekend showed that Chinese industrial output rose more-than-forecast in October, while consumer price inflation inched up modestly.
Industrial production in China rose 10.3% last month, beating expectations for a 10.0% increase, while CPI inched up to 3.2% from 3.1% in September, missing estimates for 3.3% inflation.
Chinese trade data released Friday showed that both imports and exports rose in October, easing concerns over a slowdown in the world’s second-largest economy and biggest consumer of the industrial metal.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. - investing.com
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