PRECIOUS-Gold falls 2 pct as U.S. jobs data dims stimulus hope

Fri Jun 7, 2013 2:53pm EDT

* Heavy pullback seen as knee-jerk reaction to payrolls data
    * Volatile trade in markets ahead of jobs data seen
    * Top bullion consumer India steps up gold import curb
    * Coming up: U.S. wholesale data Tuesday

 (Adds market details, comment, updates prices)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, June 7 (Reuters) - Gold fell around 2
percent on Friday, its biggest one-day drop in over three weeks,
as funds dumped bullion after resilient U.S. jobs data suggested
the Federal Reserve could begin to scale back its monetary
stimulus later this year.
    The metal posted its first weekly drop in two weeks after
Friday's selloff more than erased gains earlier this week. A
sharp dollar drop and strong physical demand had lifted gold
above $1,400 an ounce for most of this week. For the week,
bullion eased 0.3 percent. 
    The United States added 175,000 jobs last month after adding
just 149,000 in April, reducing hopes of prolonged stimulus, and
that weighed down on gold's inflation-hedge appeal. 
    "It's a knee-jerk reaction to the jobs data. Demand for gold
is currently in the summer doldrums and the data provided an
excuse to sell," said David McAlvany, CEO of McAlvany Financial,
a unit of McAlvany Wealth, which has $475 million in assets
under management.
    Spot gold was down 2.1 percent at $1,383.96 an ounce
by 2:28 p.m. EDT (1828 GMT), having hit a low of $1,377.29, the
lowest since May 28.
    U.S. Comex gold futures for August delivery settled
down $32.80 an ounce at $1,383.00.
    The nonfarm payrolls report also showed that U.S.
unemployment rate ticked a tenth of a point higher to 7.6
percent, but only because more Americans began to hunt for jobs.
 
    "The employment number is better than consensus, and it
suggests that Fed bond buying will end sooner than later," said
Phillip Streible, senior commodities trader at futures brokerage
R.J. O'Brien. 
    Despite the sharp pullback in prices, trading volume was
about 15 percent below its 30-day average, preliminary Reuters
data showed.
    Unusual, volatile trading in markets just ahead and after
U.S. jobs data was released caused brief halts in stock and bond
futures. It was not clear what sparked the volatility but this
type of movement has happened in the past when traders tried to
speculate on the outcome of data ahead of its release.
 
    A CME Group spokesman said there was no trading halt in gold
futures on Friday.

    INDIA ACTS ON GOLD
    Officials in the world's biggest bullion consumer, India,
continued efforts to curb gold imports on Friday, with the
Reserve Bank of India extending restrictions on loans against
security of gold coins per customer to all co-operative banks.
 
    This came after India announced another increase in its
import duty for gold this week. 
    Silver was down 3.8 percent at $21.74 an ounce.
Platinum slipped 1.6 percent to 1,502.49 an ounce, while
palladium edged down 0.4 percent to $755.50 an ounce.
    
 2:28 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1383.00 -32.80  -2.3  1377.10 1417.70  182,864
 US Silver JUL  21.743 -0.964  -4.2   21.610  22.755   68,969
 US Plat JUL   1502.60 -26.70  -1.7  1482.30 1539.20   14,814
 US Pall SEP    761.20  -1.10  -0.1   746.10  763.00    3,137
                                                               
 Gold          1383.96 -29.19  -2.1  1378.25 1417.46         
 Silver         21.740 -0.850  -3.8   21.700  22.800
 Platinum      1502.49 -24.01  -1.6  1488.00 1537.75
 Palladium      755.50  -3.22  -0.4   748.50  759.75
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        194,103   223,652   181,238     21.58   -0.24
 US Silver       84,756    57,769    55,649     31.07   -0.02
 US Platinum     15,718    11,528    11,673     22.25    0.78
 US Palladium     3,179     6,531     5,571                  
                                                               
 

 (Additional reporting by Clara Denina in London; Editing by
Gunna Dickson and James Dalgleish)
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Comments (3)
Redrubberball wrote:
Good, the lower it goes, the greater opportunities to buy more, assuming that a spot price isn’t reached at which no supply can be delivered!

Jun 07, 2013 1:00pm EDT  --  Report as abuse
Xiaowei29 wrote:
Deja vu all over again. More phoney employment numbers and more market manipulation courtesy of the bullion banks and their counterparts in the central banking system.

Jun 07, 2013 1:31pm EDT  --  Report as abuse
Herman1965 wrote:
Just remember, these jobs are service sector jobs, emptying bedpans, cleaning toilets, burger manufacturing, Walmart jobs. Many require supplemental government help like food stamps. They could add a million of these low paying jobs a month and our economy would still be in the toilet.

Jun 07, 2013 2:40pm EDT  --  Report as abuse
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