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Gold tumbles on upbeat U.S. jobs report

CommoditiesOct 03, 2014 02:44PM ET
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Looming end to U.S. monetary stimulus programs softens gold prices - Gold futures fell to near 4-year lows on Friday after data revealed the U.S. picked up far more payrolls in September than expected, which sent investors betting the Federal Reserve may raise interest rates sooner than later.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,193.10 a troy ounce, down 1.81%, up from a session low of $1,190.40 and off a high of $1,215.80.

The December contract settled down 0.03% at $1,215.10 on Thursday.

Futures were likely to find support at $1,158.70 a troy ounce, the low from July 29, 2010, and resistance at $1,224.00, Thursday's high.

The Department of Labor reported earlier that the U.S. economy added 248,000 jobs in September, far more than the expected 215,000 increase. The number of jobs created in August was revised to 180,000 from a previous estimate of 142,000.

In addition, the U.S. unemployment rate ticked down to 5.9% last month from 6.1% in August.

Analysts had expected the rate to remain unchanged, and the numbers boosted the dollar by cementing expectations for the Federal Reserve to close its monthly bond-buying program later this month and begin hiking interest rates sooner rather than later in 2015.

Federal Reserve asset purchases, in effect on and off since the 2008 financial crisis, have boosted gold prices by suppressing long-term interest rates, which weakens the dollar.

Gold and the dollar tend to trade inversely with one another.

Elsewhere, the Institute of Supply Management said its non-manufacturing purchasing managers' index slipped to 58.6 in September from a reading of 59.6 in August. Analysts had expected the index to fall to 58.5 last month.

A separate report showed that the U.S. trade deficit narrowed to $40.10 billion in August from $40.30 billion in July, whose figure was revised from a previously estimated deficit of $40.60 billion.

Analysts had expected the trade deficit to widen to $40.90 billion in August.

Meanwhile, silver for December delivery was down 1.23% at $16.837 a troy ounce, while copper futures for December delivery were up 0.16% at $3.003 a pound.

Gold tumbles on upbeat U.S. jobs report

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Ralph Wetzel
Ralph Wetzel Oct 03, 2014 6:15PM ET
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yeah right, no rate hick anytime soon
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