March 12, 2018 / 10:50 AM / 8 days ago

PRECIOUS-Gold slips as U.S. jobs data boosts risk appetite

    * Stocks jump to two-week high after U.S. data
    * Report shores up bets on more U.S. rate hikes
    * GRAPHIC-2018 asset returns:

 (Updates throughout, adds LONDON dateline)
    By Jan Harvey
    LONDON, March 12 (Reuters) - Gold fell on Monday as the
previous session's upbeat U.S. payrolls data sparked a fresh
rally in stock markets and shored up expectations that the
Federal Reserve would press ahead with further interest rate
hikes this year. 
    World stocks hit a two-week high on Monday after Friday's
strong jobs data helped offset investors' concerns about the
potential for a trade war between the United States and other
major economies.            
    Spot gold        was down 0.5 percent at $1,316.91 an ounce
at 1035 GMT, while U.S. gold futures         for April delivery
were 0.5 percent lower at $1,317.40 an ounce.
    "We are now getting within distance of the FOMC (Federal
Open Market Committee) meeting next week, with the rate hike
being expected to be executed," Saxo Bank's head of commodity
strategy Ole Hansen said. 
    "We've seen in the past that gold has been struggling ahead
of these announcements, so I think we're just being sucked into
the slipstream of that meeting. That's raising the risk that
gold could be a bit more on the defensive."
    Money market traders stuck to bets that the Fed would raise
interest rates three times this year after data released on
Friday showed U.S. job growth recorded its biggest increase in
more than 1-1/2 years in February.                         
    Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding bullion, while boosting
the dollar, in which it is priced.
    U.S. Treasury yields advanced after the jobs data, while
stock markets rallied as the numbers sparked a surge in risk
appetite. That weighed on the dollar on Monday, though the
impact of the softer U.S  currency on gold was muted.
    Gold slipped to its lowest in a week on Friday after the
payrolls report, having come under pressure earlier in the week
after failing to break through the $1,340 an ounce level for a
second time in two weeks.  
    "Gold is likely to continue to run into offers around
$1,330, (the) 50-day moving average, over the near term as
participants adjust following Friday's strong U.S. jobs data,"
MKS said in a note. 
    "An easing of tensions on the Korean peninsula should strip
the metal of some lingering risk premium." 
    Gold had benefited last year from concerns over North
Korea's standoff with the United States. 
    Speculators raised their net long position in gold by 4,178
contracts to 161,812 contracts in the week to March 6, Commodity
Futures Trading Commission (CFTC) data showed.             
    Among other precious metals, silver        was down 0.7
percent at $16.47 an ounce. Palladium        was 1 percent lower
at $986.22 an ounce, while platinum        was down 0.8 percent
at $957.40 an ounce.

 (Additional reporting by Eileen Soreng in Bengaluru
Editing by Susan Fenton)
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