Gold prices fall from seven-week high after positive US jobs data

Gold fell on Friday after hitting a seven-week high earlier this week, as the dollar rose from multi-month lows, after monthly U.S. non-farm payrolls data was better-than-expected.

Spot gold was down 0.77 percent to $1,258.36 per ounce, near its lowest level since July 28th when gold traded as low as $1,256.90 per ounce. It traded flat at $1,268.61 per ounce before the report.

U.S. gold futures for December delivery settled at $1,264.60 per ounce.

The U.S. economy added 209,000 jobs in July and the unemployment rate was 4.3 percent, according to a government report Friday. Economists surveyed by Reuters had expected the report to show growth of 183,000 with the jobless rate ticking down to 4.3 percent, the lowest since March 2001.

“The strong rise in non-farm payrolls together with the drop back in the unemployment rate to a joint 16-year low suggests the Fed will still need to raise rates again later this year, even if inflation remains subdued,” said Simona Gambarini, commodities economist at Capital Economics.

“In the absence of substantial geopolitical risks, we think that Fed tightening will prove too strong a headwind for gold prices this year. We expect the gold price to end the year at $1,150 per ounce.”