Gold Falls on Profit Taking After Positive US Jobs Report

Stronger-than-forecast growth in U.S. employment last month knocked gold futures lower Friday, with the data seen as an excuse by some traders to book profits on long positions.

The market focused on the increased number of jobs reported by the Labor Department more-so than a small uptick in the jobless rate itself.

Around 9:25 a.m. EST, gold for April delivery was $16.70, or 1.2%, lower to $1,335.10 per ounce on the Comex division of the New York Mercantile Exchange. May silver was down 68.9 cents, or 3.2%, to $20.885 an ounce.

The March dollar index was up 0.1 point to 79.765. The euro remained stronger against the U.S. currency, although it backed down from its overnight high.

The Labor Department said nonfarm payrolls rose 175,000 in February, a marked pick-up from the weaker trend of the prior two months. Most consensus expectations had been for around 140,000 to 163,000 new jobs.

“The market is cueing off of that, rather than the small uptick we saw in the unemployment number,” said Sterling Smith, futures specialist with Citi Institutional Client Group. “The base nonfarm payrolls number beating expectations is driving the gold market lower as that puts to rest any little ideas that were cropping up about extending QE (Federal Reserve quantitative easing) or anything of that sort.”

Further, the previously reported rise in January payrolls was upped to 129,000 from 113,000, and the December gain was lifted to 84,000 from 75,000.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza