Gold futures headed for the biggest drop since May after the U.S. added more jobs last month than forecast, curbing demand for a haven asset.
The addition of 288,000 jobs followed a 224,000 gain the prior month, Labor Department figures showed today. The median forecast in a Bloomberg survey of economists called for a 215,000 advance.
Bullion rose 11 percent this year through yesterday as the Federal Reserve said it will keep interest rates low for a considerable time after ending bond buying, while unrest in Iraq and Ukraine spurred demand for a haven. The metal plunged 28 percent in 2013, the most in three decades, as the U.S. economy gained traction.
“The job numbers are telling us that the economy is healthy, and people don’t need a lot of safe haven going forward,” Alfonso Esparza, a senior currency analyst in Toronto at Oanda Corp., said in a telephone interview. “Gold will probably now start weakening again.”
Gold futures for August delivery fell 1.1 percent to $1,316.60 an ounce at 8:43 a.m. on the Comex in New York, heading for the biggest loss since May 27. Prices reached $1,334.90 on July 1, the highest since March 24.