3 Min Read
* U.S. wage growth, labor date points to strength
* Gold posts biggest monthly loss of 2014
* Bullion ignores heavy S&P 500 losses
* Coming up: U.S. July nonfarm payrolls Friday (Updates market activities)
By Frank Tang and Clara Denina
NEW YORK/LONDON, July 31 (Reuters) - Gold fell 1 percent to a six-week low on Thursday, ignoring sharp losses in the S&P 500 equities index, as strong U.S. wage growth data and signs of an improving job market reduced the need for safe-haven buying.
Bullion posted more a loss of nearly 3.5 percent for July, its biggest monthly loss this year, as the Federal Reserve's reduced bond-buying stimulus and a better undertone in the U.S. economy decreased the metal's appeal as a hedge.
On Thursday, the price of gold came under pressure after U.S. data showed labor costs recorded their biggest gain in more than 5-1/2 years in the second quarter, bolstering the economy's outlook.
U.S. stocks slumped in a broad decline, with the S&P 500 falling below a key support at its 50-day moving average. Gold has largely moved in inverse correlation with the equities market so far this year.
"Even though the S&P is coming off, nothing has signalled the gains in equity markets are going to slow down, so there is no immediate need for gold right now," said Thomas Capalbo, precious metals trader at brokerage Newedge.
Spot gold fell 1 percent to $1,282.15 an ounce by 2:08 p.m. EDT (1628 GMT). Earlier, it hit its lowest since June 19 at $1,280.76 an ounce.
The metal notched a 3.4 percent drop for the month, reversing a gain of around six percent in June, when geopolitical tensions between the West and Russia over Ukraine triggered buying.
U.S. gold futures for December delivery settled down $14.10 at $1,282.80 an ounce.
Gold prices were also dragged lower as U.S. crude oil tumbled to a more than four-month low under $10 a barrel due to a shutdown in a key refinery in Kansas that consumes the crude oil.
Thursday's data also showed a continued strengthening of U.S. labor market conditions even though the number of Americans filing new claims for unemployment benefits rose last week.
Gold investors are also digesting news that Argentina defaulted for the second time in 12 years.
The next market focus will be U.S. nonfarm payrolls data due on Friday, which is expected to show that U.S. employers added 233,000 new jobs in July.
Among other precious metals, spot silver was down 1 percent to $20.38 an ounce. Platinum fell 1.1 percent to $1,457 an ounce, while palladium dropped 0.9 percent to $868.26 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Jane Baird, William Hardy, Dale Hudson, Bernard Orr and Nick Zieminski)