Gold price falls back after solid US jobs report
Singapore (Dec 7) Gold was trading near a three-week high on Monday, boosted by a short-covering rally after a strong US nonfarm payrolls report cemented the case for a Federal Reserve rate hike next week.
Spot gold slipped 0.2 percent to $1,084.80 an ounce by 2:19 pm Beijing time, but held near the $1,088.70 level hit in the previous session. It gained 2.3 percent on Friday after slumping to a near-six-year low earlier in the week.
Data on Friday showed US nonfarm payrolls rose 211,000 last month, and the unemployment rate held at a 7-1/2-year low of 5 percent. September and October data were revised to show 35,000 more jobs than the US Labor Department previously reported.
The robust data removed any doubts about a possible rate hike at the Fed's next policy meeting later this month.
Gold fell to multi-year lows last week on expectations of a rate hike as higher rates tend to weigh on non-interest-paying gold by increasing the opportunity cost of holding it. But the jobs data triggered a short-covering rally.
An "uneasy calm" prevails in financial markets about the first increase in US interest rates in almost a decade, which is widely expected later this month, the Bank for International Settlements said in its latest report.
Elsewhere, the richest Hindu temple in the world could soon come to the rescue of Indian Prime Minister Narendra Modi's plan to recycle tons of idle gold and cut economy-hurting imports.
India is planning to ban imports of 24-carat gold jewelry, the Indian newspaper Daily News and Analysis reported on Friday.