* U.S. non-farm payrolls data beat expectations
* Prospect of further U.S. monetary easing recedes
* Gold, platinum come off highest since mid-November
By Jan Harvey
LONDON, Feb 3 Gold prices fell more than 1
percent on Friday, surrendering gains that earlier took them to
11-week highs, after better-than-expected U.S. payrolls data
lifted the dollar and called into question the prospect of
further U.S. quantitative easing.
Expectations that U.S. monetary policy will remain
ultra-loose have boosted investors' appetite for bullion this
year, lifting prices 11 percent since end-December.
Spot gold was at $1,736.75 an ounce at 1500 GMT, down
1.3 percent, after having earlier peaked at $1,762.90. U.S. gold
futures for February delivery were down $18.50 an ounce
Data from the Labor Department showed the U.S. economy in
January created jobs at the fastest pace in nine months, adding
243,000 positions, and the unemployment rate dropped to a near
three-year low of 8.3 percent.
"I think people are asking some questions now with regards
to the Fed's view about low interest rates into 2014," said Ole
Hansen, vice president at Saxo Bank. "If job creation carries on
at this pace, that could be revised, thereby removing some of
the support for gold."
The tone of the report was further strengthened by revisions
to November and December payrolls data, which showed 60,000 more
jobs were created than previously reported.
The dollar rose to session highs against the euro after the
payrolls report, while equity markets also rallied. Among other
commodities, oil prices extended gains to rise more than $1 a
barrel amid expectations for firm demand from the United States.
"Today's release is a very positive report and will soothe
some of the deeper concerns at the Fed," said Camilla Sutton,
chief currency strategist at Scotia Capital. "I think
increasingly (QE3) is being pushed to the background."
A U.S. Federal Reserve pledge last month to keep interest
rates at rock-bottom levels and hints of another round of
monetary easing, which would keep the dollar weak and the
opportunity cost of holding bullion low, boosted gold.
Fed Chairman Ben Bernanke on Thursday defended the bank's
policies against charges from Republican lawmakers they risked
sparking inflation, saying the economy still needs plenty of
"Yesterday's reaffirmation from the U.S. Fed (chairman) that
he is committed to keep rates low ... (gave) gold the necessary
boost to hold gains and also break key resistance," Richcomm
Global Services senior analyst Pradeep Unni said.
Among other precious metals, silver was down 1.6
percent at $33.72 an ounce. Its ratio to gold, the number of
silver ounces needed to buy an ounce of gold, eased back to 51.3
from a high of 57.4 hit in December.
Silver was the best performing of the major precious metals
last month, rising more than 20 percent. Silver coin sales under
the U.S. Mint's American Eagle programme totalled 6.107 million
ounces in January, their highest in a year.
Spot platinum was down 0.6 percent at $1,617.24 an
ounce, while spot palladium was down 0.1 percent at
$704.75 an ounce. Platinum earlier hit its highest since Nov. 16
Platinum prices are up 15.9 percent this year, supported by
concerns over output of the metal from major producer South
Africa. Natixis said it expects output growth to slow from its
estimate of a 6 percent increase in 2011.
"South African producers are suffering from high costs due
to lower ore concentration, leading to deeper drilling, and an
increase in energy costs," it said.
"For 2012 we expect output to grow by around 3 percent to
206 tonnes as investment in South Africa and Zimbabwe become
(Editing by Keiron Henderson and Jane Baird)