Gold fell more than 2 per cent on Friday as global stock markets and the dollar rose on stronger-than-expected US jobs data, raising expectations that the Federal Reserve will increase interest rates by midyear.
US nonfarm payrolls increased by 257,000 last month, topping expectations for 234,000, with the unemployment rate ticking up to 5.7 per cent due to more people entering the labor force.
Spot gold dropped to a three-week low of $1,228.25 an ounce earlier and was down 2.4 per cent at $1,234.70 an ounce by 2:02 p.m. EST (1902 GMT), its biggest fall since Dec. 15. It has lost 3.8 per cent so far this week, which would be its largest fall since the week ended Oct. 31.
US gold for April delivery fell 2.2 per cent to settle at $1,234.60 an ounce.
The dollar rose 1.2 per cent against a basket of leading currencies, helped by a rise in the benchmark 10-year US Treasury yield to more than 1.9 per cent. Wall Street rose and European equities hit a seven-year high.
Elsewhere, holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose on Thursday to 24.86 million ounces, the highest since September.
China’s gold consumption fell 24.7 per cent to 886 tonnes last year even as output from the world’s top consumer climbed 5.5 per cent, the China Gold Association said.
Spot silver slid 3.7 per cent to $16.62 an ounce. Platinum was down 2.6 per cent at $1,218.50 an ounce and palladium dropped 1.7 per cent to $779.00 an ounce.
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