Gold slips B50 on rosy US jobs data

Gold slips B50 on rosy US jobs data

Gold prices slipped 50 baht at its opening at 9.08am on Saturday.

The Gold Traders Association announced the buying price at 18,600 baht and the selling price at 18,700 baht per baht-weight for gold bars.

The buying price for gold ornaments was 18,328.44 while their selling price was 19,100 baht per baht-weight.

The prices were adjusted two times on Thursday, ending unchanged from Wednesday's close. The market was closed on Friday for a holiday.  

In world markets, gold slumped after the US added the largest number of jobs in almost three years, fuelling concern that the Federal Reserve will move closer to raising interest rates, Bloomberg reported on Friday from New York.

Prices for gold options betting on a rally tumbled, and the metal’s 60-day historical volatility climbed to the highest since March. The dollar rose to the highest since 2009 against a basket of currencies, cutting the appeal of bullion as an alternative asset.

Futures fell to a four-year low last month on waning demand for the metal as a store of value. Employers in the US added 321,000 jobs in November, the most since January 2012. The report boosted speculation that Fed policy makers will be assured the economy is strong enough to withstand an increase in borrowing costs next year.

“A sell-off in gold is inevitable with this kind of numbers,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said. “This tells us rates will rise sooner rather than later.”

Gold futures for February delivery dropped 1.4% to settle at $1,190.40 an ounce at 1.49pm on the Comex in New York. Prices touched $1,130.40 on Nov 7, the lowest since 2010.

The outlook for higher interest rates erodes the allure of the metal, which generally offers investors returns through increasing prices. Holdings in global exchange-traded funds backed by bullion are at the lowest since 2009, heading for a seventh straight week of declines. Investor demand for precious metals has waned amid a rally for equities and the dollar and as inflation remained low.

Gold traders often track energy prices and their impact on inflation. Oil has collapsed into a bear market as US output climbed to the highest in more than three decades. Fed officials have said that lower energy prices may hold down consumer costs in the near term. Crude futures in New York fell as much as 2.5% today.

The metal in 2013 tumbled 28%, ending a 12-year bull run. Prices climbed 70% from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent in a bid to shore up economic growth. The central bank ended its third round of bond purchases in October.

This year, gold prices have fallen 1%, while silver retreated 16%.

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