Investing.com - Gold prices struggled in North American trade on Monday, touching a one-week low after the latest U.S. employment report bolstered expectations of faster economic growth and revived speculation that the Federal Reserve will raise interest rates this year.
Gold for December delivery on the Comex division of the New York Mercantile Exchange fell to a session low of $1,335.30 a troy ounce, the weakest since July 29. It was last at $1,341.25 by 12:52GMT, or 8:52AM ET, down $3.15, or 0.23%.
On Friday, gold tumbled $23.00, or 1.68%, after data showed the U.S. economy created 255,000 jobs last month, well above expectations for 180,000. June’s number was revised up to 292,000 jobs compared with the previous estimate of 287,000.
The report also showed that average hourly earnings rose month-on-month by 0.3%, beating expectations for a 0.2% gain. They were up 2.6% on the year.
The upbeat data reignited speculation that the Federal Reserve will lift interest rates this year. Fed funds futures are currently pricing in a 21% chance of a rate hike by September, compared to less than 10% late last week. December odds were at around 49%, up from 33% ahead of the report.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, surged to a one-week high of 96.50 in wake of the jobs report on Friday. It was at 96.30 early Monday.
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.
The yellow metal flirted with a more than two-year high above the $1,370-level less than a week ago as a string of disappointing U.S. economic data prompted market players to push back expectations for the next U.S. rate hike.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
For the year, the precious metal is up nearly 26%, boosted by concerns over global growth and expectations of monetary stimulus.
Elsewhere in metals trading, copper futures tacked on 1.9 cents, or 0.88%, to $2.173 a pound, as investors digested monthly trade data out of China.
Exports slumped 4.4% from a year earlier, worse than forecasts for a decline of 3.0%, while imports dropped 12.5%, compared to expectations for a fall of 7.0%. That left China with a surplus of $52.3 billion last month, the General Administration of Customs said.
China is the world’s largest copper consumer, accounting for nearly 45% of world consumption.