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PRECIOUS-Gold falls 1.7 pct as U.S. payrolls rekindle taper fears
November 8, 2013 / 11:06 AM / 4 years ago

PRECIOUS-Gold falls 1.7 pct as U.S. payrolls rekindle taper fears

* Frantic sell orders in strong volume seen after jobs data
    * Dollar gains as expectations grow on December Fed taper
    * Sharp gains in U.S. equities and dollar rise pressure gold
    * Coming up: U.S. bond market, gov't closed for Veterans Day

 (Updates market activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Nov 8 (Reuters) - Gold dropped 1.7 percent
on Friday, notching its biggest one-day fall in more than a
month, as surprisingly strong U.S. jobs data raised the prospect
that the Federal Reserve may soon decide to temper its
bond-buying stimulus.
    A flurry of sell orders in heavy volume sent U.S. gold
futures over $10 lower just minutes after the October nonfarm
payrolls data, setting a weaker tone for the rest of the day. A
similar move in gold futures was also seen after Thursday's
strong GDP report.
    ( For a graphic, click here: link.reuters.com/pys54v
 )
    Rallying U.S. equities and a soaring U.S. dollar sent gold
to a three-week low, as bullion underperformed silver and
platinum group metals. The S&P 500 index rose 1 percent
on better economic hopes, while the dollar index was up
0.5 percent.  
    U.S. job growth unexpectedly accelerated in October, with
employers adding 204,000 jobs, while 60,000 more jobs were
created in September and August than previously reported, the
Labor Department said. 
    "Those payroll numbers made the folks who buy gold nervous
as they did not go in the direction they wanted to see,
suggesting that tapering could be back on the table," said Axel
Merk, chief investment officer at California-based Merk Funds,
which have $450 million assets under management.
    Spot gold was down 1.7 percent at $1,285.06 an ounce
by 3:20 p.m. EST (2020 GMT). The metal fell 2.2 percent for the
week, its second consecutive weekly loss. 
    U.S. Comex gold futures for December settled down
$23.90 at $1,284.60 an ounce, with trading volume about 5
percent above its 250-day average, preliminary Reuters data
showed.
    Gold has lost about a fifth of its value this year due to
fears the Fed would begin cutting back its $85 billion monthly
bond purchases. The metal's inflation-hedge appeal has been
burnished by the bond purchases and low interest rates.
    "At the moment, the market is looking at underlying growth
and can see how the U.S. is accelerating and that very simply
leads to tapering one way or another, which is obviously not
bullish for gold," BofA Merrill Lynch analyst Michael Widmer
said.
    The metal had managed a rebound in recent weeks after a
prolonged budget battle in Washington in October led investors
to believe the Fed may not start withdrawing support for the
economy and possibly push the tapering into next year.
    However, after Friday's strong jobs report, some economists
said it would be unwise to rule out chances the Fed could
curtail its bond-buying as soon as its next meeting in December.
    Among other precious metals, silver was down 1
percent at $21.43 an ounce. Platinum fell 0.6 percent to
$1,439.49 an ounce, while palladium dropped 0.4 percent
to $755.47 an ounce. 
 3:20 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1284.60 -23.90  -1.8  1280.50 1313.40  171,702
 US Silver DEC  21.317 -0.340  -1.6   21.250  21.905   48,987
 US Plat JAN   1442.90 -13.90  -1.0  1437.50 1461.00   10,999
 US Pall DEC    757.90  -1.25  -0.2   753.50  764.25    4,285
                                                               
 Gold          1285.06 -22.49  -1.7  1281.75 1312.66         
 Silver         21.430 -0.210  -1.0   21.280  21.800
 Platinum      1439.49  -9.26  -0.6  1441.75 1458.50
 Palladium      755.47  -3.25  -0.4   755.77  762.00
                                                               
 TOTAL MARKET              VOLUME    30-D ATM VOLATILITY
                CURRENT   250D AVG   CURRENT     CHG
 US Gold        195,515    189,283     23.18   -1.01
 US Silver       59,021     58,610     35.14    1.70
 US Platinum     11,288     12,978     20.36    0.00
 US Palladium     4,937      5,806                  
                                                               
    

 (Editing by William Hardy, John Stonestreet, Nick Zieminski and
James Dalgleish)

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