Prices of gold futures retreated on Monday from a maximum 3 weeks after the US dollar recovers optimistic about that Friday’s jobs data bolstered the view that the US Federal Reserve will raise interest rates next week.
Gold for February delivery on the Comex shed $7.20, or 0.66%, to trade at $1,076.90 a troy ounce. On Friday, it touched its highest since Nov. 16 at $1,088.70.
Spot gold was down 0.3 per cent at $1,083.06 an ounce.
The US dollar index, which measures the strength of the the greenback versus a trade-weighted basket of six major currencies, rose 0.55% to 98.81. The dollar lost nearly 2% last week as the euro rose after the recent easing measures announced by the European Central Bank on Thursday they fell short of the market expectations.
A short-covering rally had swept the highest precious metal after the employment data, which originally could not significantly raise the dollar. Gold ended on Friday 2.3 percent, its biggest daily gain since January, but failed to sustain the gains.
The prices of gold are often driving inversely related to the US dollar, as gold becomes more expensive for buyers using other currencies.
The Department of Labour said Friday that the US economy added 211,000 jobs last month, beating expectations of 200,000. The jobless rate remained stable at 5.0%, matching forecasts.
Solid data solidified expectations that the Fed will increase interest rates for the first time in nearly a decade at its next meeting on 15-16 Dec.
In futures trading, gold for delivery in far-month April next year was trading Rs 43, or 0.17 per cent down, at Rs 25,799 per 10 grams at Multi Commodity Exchange with a weak trend overseas amid profit-booking.
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