Investing.com – Gold prices slumped in the wake of a surge in the dollar, after a stronger-than-expected nonfarm payrolls report eased concerns over a possible slowdown in the U.S. economy.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell $11.25, or 0.89%, to $1,256.62. a troy ounce.
Gold remained on track to snap a three-week winning streak amid renewed expectations the Federal Reserve will keep to its plan to raise rates at least once more this year, after U.S nonfarm payrolls report topped expectations, pointing to continued strength in the labor market.
The U.S. economy created 209,000 jobs in July, handily beating the consensus estimate for the creation of 183,000 jobs.
As was widely expected the jobless rate remained unchanged at 4.3% while average hourly earnings met expectations, rising 0.3% from the prior month.
The increase in wages is being closely monitored by the Federal Reserve for evidence of continuing strength in the labor market and upward pressure on inflation.
Gold prices had traded within a narrow range for most of the week, struggling to capitalize on weakness in the dollar, as market participants awaited further insight into the strength of the labor market.
"They're stumped. I think they will continue on a path of monetary tightening because they will expect wages will accelerate," Michael Arone, Chief Investment Strategist at State Street Global Advisors said of Yellen and fellow labor economist Fed Vice Chair Stanley Fischer.
In other metals trading, silver futures fell 2.12% to $16.277 while platinum futures rose by 0.46% to $969.
Copper traded at $2.885, up 0.0.24%, while natural gas, fell by 0.57% to $2.784.