Gold Futures Extend Decline as U.S. Wage Gains Fuel Rate Angst

  • Mining stocks fell the most in three weeks, paced by Yamana
  • ‘Gold might have a small correction today,’ RJO says

Gold Traders Most Bullish in a Year

Gold futures fell for the first time this week after a report showed U.S. paychecks rose the most during the current expansion, adding to the case for the Federal Reserve to continue raising interest rates.

The 156,000 increase in December payrolls followed a 204,000 rise in November that was bigger than previously estimated, government data showed Friday. The median forecast in a Bloomberg survey of economists called for a 175,000 advance. The jobless rate ticked up to 4.7 percent as the labor force grew, and wages rose 2.9 percent from December 2015.

Bullion capped the biggest quarterly drop since 2013 in December as signs of stronger U.S. growth fueled speculation that the Fed will continue to tighten monetary policy this year. Higher borrowing costs reduce the appeal of owning gold because it doesn’t pay interest. Minutes from the central bank’s last meeting indicated officials considered gradual rate hikes were warranted.

The hourly earnings data “shows a little bit better gauge of where things are going with the economy,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Gold might have a small correction today. You’re seeing that optimism jump back into” the stock market,  he said.

Gold futures for February delivery fell 0.7 percent to settle at $1,173.40 an ounce at 1:39 p.m. on the Comex in New York, paring this week’s gain to 1.9 percent as U.S. equities headed for the best week in a month.

A gauge of 16 senior global gold producers tracked by Bloomberg Intelligence declined 2.1 percent, the most in three weeks, paced by losses in Yamana Gold Inc., Kinross Gold Corp. and Newmont Mining Corp.

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