Gold Futures Fall as U.S. Payrolls Gain Fuels Stimulus Concern

Gold fell to a five-month low after the U.S. added more workers than forecast last month, fueling concern that the Federal Reserve will start to curb stimulus.

Payrolls climbed 203,000 in November, exceeding the 185,000 median forecast in a Bloomberg survey, the Labor Department said. Prices swung between gains and losses after the report, falling as much as 1.8 percent to $1,210.10 an ounce, the lowest since July 5, before jumping almost $35 in about 30 minutes. The metal dropped 27 percent this year on concern the Fed will cut its $85 billion in monthly bond buying.

“The gold market doesn’t like the jobs report, because it reinforces the threat of the removal of stimulus,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Gold could work lower from here, but I don’t expect a huge selloff. We’ve already seen so much liquidation.”

Gold futures for February delivery slid 0.2 percent to settle at $1,229 at 1:44 p.m. on the Comex in New York. The metal fell 1.7 percent this week.

Bullion is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. The U.S. economy grew more than initially estimated in the third quarter, government figures showed yesterday.

Minutes of the Fed’s October meeting released Nov. 20 showed policy makers expected an improving economy to allow debt purchases to be trimmed in coming months.

“Concerns about Fed tapering are coming to the forefront,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview.

Holdings in gold-backed exchange-traded products fell yesterday to the lowest since March 2010, data compiled by Bloomberg show.

Silver futures for March delivery lost 0.2 percent to $19.523 an ounce in New York, capping the fifth weekly decline since late October.

On the New York Mercantile Exchange, platinum futures for January delivery slipped 0.5 percent to $1,356.30 an ounce. Palladium futures for March delivery declined 0.1 percent to $736.15 an ounce. The metal advanced 2.3 percent this week.

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