Gold drops on strong US jobs growth, stimulus fears
US employers added 195,000 new jobs to their payrolls last month, exceeding expectations of 165,000, the Labor Department said on Friday, cementing expectations the Fed will start winding down its USD 85 billion monthly bond purchases.
July 08, 2013 / 13:04 IST
Gold fell for a third session on Monday on fears the US Federal Reserve could soon begin tapering its bond-buying stimulus after a stronger-than-expected jobs report.
FundamentalsSpot gold fell 0.3 percent to USD 1,219.31 an ounce by 0004 GMT following a 2 percent decline on Friday.Comex gold was higher by about USD 6 at USD 1,218.30.Also Read: Indian investment in US at $11 bn; creates 100,000 jobsUS employers added 195,000 new jobs to their payrolls last month, exceeding expectations of 165,000, the Labor Department said on Friday, cementing expectations the Fed will start winding down its USD 85 billion monthly bond purchases.The Fed is likely to begin shrinking the size of its debt purchase program, intended to prop up economic growth and support the labor market, by September, according to the majority of economists at large Wall Street firms.Gold posted its biggest quarterly loss on record, down 23 percent for April-June and hit a near 3-year low of USD 1,180.71 last month, after Fed Chairman Ben Bernanke said the economy was recovering strongly enough for the bank to begin tapering.SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.28 percent to 961.99 tonnes on Friday.China's May gold imports from Hong Kong jumped more than a third from the previous month as lower prices attracted buyers in the world's second biggest bullion consumer.Jewellers in India are banking on a growing appetite for diamonds in the country and resilient demand for gold among its non-residents to offset a slowdown caused by a government clampdown on imports of the precious metal.Market NewsThe US dollar hit a fresh three-year high against a basket of major currencies in Asia on Monday as market expectations grew that the Fed will scale back stimulus as early as September following solid jobs growth. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
