Gold opens weaker in early Asia as U.S. jobs data weighs

Investing.com - Gold prices opened lower in early Asia on Monday as investors now strongly expect the Federal Reserve will move to raise rates sometime in 2015 following strong U.S. jobs data.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at $1,188.30 a troy ounce, down 0.34%, after settling at $1,190.40 by close of trade Friday, down $17.30, or 1.43%.

Last week,gold futures tumbled sharply on Friday, as robust U.S. non-farm payrolls data fueled optimism over the strength of the economy and boosted expectations that the Federal Reserve will begin to raise rates sooner and faster than previously thought.

In a report, the Department of Labor said that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.

October’s figure was revised up to 243,000 from a previously reported 214,000, while the unemployment rate remained unchanged at a six-year low of 5.8%.

The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.

Also on the Comex, silver futures for March delivery sank 0.71% $16.175 a troy ounce and copper futures for March delivery dipped 0.37%, on Friday to $2.904 a pound.

Comex copper advanced 5.8 cents, or 1.99%, on the week, on hopes for broad-based stimulus from central banks in China, Japan and Europe.

China is to produce what will be closely watched reports on trade, consumer prices and industrial production in the week ahead.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.