Gold undercuts $1,200 and turns negative for year
New York (Oct 3) Gold prices slumped Friday in the wake of an upbeat jobs report, turning negative for the year and briefly trading below $1,200 an ounce.
Gold for December delivery GCZ4, -1.84% was last down $13.20, or 1.1%, to $1,201.90 an ounce after slipping as low as $1,198.40, according to FactSet data. The yellow metal is trading at levels last seen in December and has turned negative for 2014, as the encouraging employment report weighed on haven demand.
The Labor Department on Friday said the U.S. economy created a better-than-anticipated 248,000 jobs in September and hiring in August turned out stronger than initially reported, showing the economy entered the fall with rising momentum. The unemployment rate also dropped to a six-year low of 5.9%.
Gold futures were down ahead of the jobs report, and then fell further after the report while U.S. stock futures have added to their gains.
In a note before the employment data, commodities analysts at Goldman Sachs recommended shorting gold.
“Despite renewed concerns over China and Europe, US fundamentals remain strong. We maintain our views of higher real rates due to a strong macro backdrop, which drives our bearish view of gold denominated in USD,” they wrote. USD refers to the U.S. dollar. Dollar-denominated commodities tend to move lower on a stronger greenback as they get more expensive to other currency holders.
December gold is on pace for a weekly drop of 1.1%. December silver SIZ4, -1.80% was last down 7 cents, or 0.4%, to $16.98 an ounce, putting it on track for a weekly slide of 3.2%.
Source: MarketWatrch