Saturday, January 5, 2013

Gold drops as U.S. jobs report fails to inspire rally

Investing.com - Gold prices dropped on Friday after the U.S. government released its December jobs report, which beat expectations but did not come in solid enough to spark a risk-on rally needed to bolster the precious metal. 

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 1.35% at USD1,652.05 a troy ounce in U.S. trading, up from a session low of USD1,626.05 and down from a high of USD1,664.45 a troy ounce.

Gold futures were likely to test support USD1,626.05 a troy ounce, the earlier low, and resistance at USD1,664.45, the earlier high.

Investors largely ditched gold positions despite positive news from the jobs front.

In the U.S. earlier, the Bureau of Labor Statistics reported the U.S. economy added 155,000 nonfarm payrolls in December, beating market calls for the economy to create 150,000 new jobs. 

In addition, the U.S. employment rate remained unchanged at 7.8% last month, though markets had hoped for a decline to 7.7%.

Meanwhile, the Bureau of Labor Statistics revised October's figures to 137,000 from 138,000 new jobs and hiked November's figure to 161,000 from 146,000.

Investors viewed the numbers as a sign the U.S. economy is improving but not entering a phase of a much more robust recovery, and largely avoided the risk-on asset class.

Uncertainty as to when the Federal Reserve may consider winding down its USD85 million monthly bond-buying program kept oil down as well.

Meanwhile on the Comex, silver for March delivery was down 2.42% and trading at USD29.978 a troy ounce, while copper for March delivery was down 0.66% and trading at USD3.692 a pound.

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