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Gold drops despite solid U.S. employment figures

Published 10/05/2012, 02:35 PM
Updated 10/05/2012, 02:36 PM
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Investing.com - Gold prices fell in U.S. trading on Friday as investors sold the precious metal for profits, shrugging off solid unemployment data that sent gold's traditional hedge, the dollar, dipping.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.94% at USD1,779.85 a troy ounce, up from a session low of USD1,774.95 and down from a high of USD1,798.05 a troy ounce.

Gold futures were likely to test support at USD1,774.95 a troy ounce, the earlier low, and resistance at USD1,798.05, the earlier high.

The U.S. unemployment rate fell to 7.8% percent in September from 8.1% in August, the Bureau of Labor Statistics reported earlier Friday.

Employers added a net 114,000 jobs in September, while households reported that total employment rose by 873,000 in September following three months of little change.

The number of unemployed Americans stands at 12.1 million, the fewest since January 2009.

Gold fell shortly after the news broke on sentiment that not enough new jobs were created last month and would likely not alter U.S. monetary policy.

More workers took on part-time jobs last month, which accounted for the drop in the headline unemployment rate.

Gold has risen in recent sessions due to loose monetary policies around the world, in the U.S. especially.

The U.S. Federal Reserve is currently running a third round of quantitative easing, a monetary stimulus tool that sees the U.S. central bank buy USD40 billion in mortgage-backed securities a month on an open-ended basis to spur recovery.

Such policy tools weaken the greenback and make gold an attractive hedge.

Elsewhere on the Comex, silver for December delivery was down 1.78% and trading at USD34.475 a troy ounce, while copper for December delivery was down 0.56% and trading at USD3.765 a pound.






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