Gold slips more than 2 per cent on strong American jobs data

New York (Feb 7)  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.

"The US employment report was good and there has been quite a sharp adjustment in interest rates expectations, with 10-year Treasury yields up 10 basis points," ABN Amro analyst Georgette Boele said.

 "I expect lower precious metals prices for the next six months up to the moment the US really starts hiking interest rates."

 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% so fa this past week, which would be the biggst drop since the week ended Oct 31.

Source: IndiaTimes