Gold firms as shares fall, steadier dollar caps upside

Frankfurt (Dec 8)  Gold firmed as European equities fell on Monday, but prices struggled to reach the $1,200 per ounce level after a robust U.S. nonfarm payrolls report pushed the dollar to a more than five-year high.

Spot gold rose 0.3 percent to $1,195.10 an ounce by 1037 GMT. The metal lost 1.1 percent on Friday when U.S. data showed employers added the largest number of workers in nearly three years in November and wage gains picked up.

U.S. gold futures rose 0.4 percent to $1,195.50 an ounce.

The strength in the economy could draw the Federal Reserve closer to raising interest rates, lift the dollar and in turn decrease demand for gold.

"Everybody has factored in interest rate increases next year and everybody is expecting continued dollar strength ... so we tend to be quite neutral on gold at the moment," Citi analyst David Wilson said.

The dollar was trading close to its highest since March 2009 on the back of the strong jobs report.

Gold was boosted by central bank liquidity and a low interest rate environment in the years after the 2008 financial crisis, which encourages investors to put money into non-interest-bearing assets.

Source: CNBC