Gold prices fell to one-week lows on Friday as the dollar gained ground after upbeat U.S. factory orders and service sector data offset the impact of a weaker than expected employment report for October.
Gold futures for December delivery settled down 0.53% at $1,271.38 on the Comex division of the New York Mercantile Exchange. For the week gold prices were down 0.2% for a third straight weekly decline.
The dollar turned positive after U.S. factory orders and ISM non-manufacturing PMI data.
The Institute for Supply Management reported that its non-manufacturing purchasing managers’ index rose to its highest level since 2005.
Another report showed that new orders for U.S.-made goods rose for the second straight month in September and orders for core capital goods rose more than expected.
The reports underlined the case for the Federal Reserve to raise interest rates at a faster pace in the coming months.
The U.S. economy added 261,000 jobs in October, the Labor Department said, falling short of forecasts for 315,000 new jobs. The unemployment rate ticked down to 4.1%, its lowest level since December.
Investors were also focused on the proposed tax overhaul outlined by Republican lawmakers on Thursday.
Some traders believe tax reforms could bolster growth, adding pressure on the Federal Reserve to raise interest rates, known as the “Trumpflation” trade.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Elsewhere in precious metals trading, silver was down 1.7% at $16.84 a troy ounce late Friday, while platinum settled at $922.65, down 0.52% for the day.
Among base metals, copper was down 0.73% at $3.115 in late trade.
In the week ahead, investors will continue to monitor the progress of the U.S. tax reform bill in what will be relatively quiet week for economic data.
China is to release data on trade and inflation while monetary policy announcements from the Reserve Bank of Australia and the Reserve Bank of New Zealand are also be on the agenda.
Ahead in November these and other significant events likely to affect the markets.
Monday, November 6
New Zealand is to publish data on inflation expectations.
Bank of Japan Governor Haruhiko Kuroda is to speak.
Canada is to publish its Ivey PMI.
New York Fed President William Dudley is to speak.
Tuesday, November 7
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
The UK is to publish industry data on house price inflation.
European Central Bank President Mario Draghi is to speak at an event in Frankfurt.
Later in the day, Bank of Canada Governor Stephen Poloz is to deliver remarks in Montreal.
Wednesday, November 8
China is to release monthly trade data.
Canada is to report on building permits.
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its monetary policy statement. The announcement is to be followed by a press conference.
Thursday, November 9
China is to release inflation data.
Canada is to produce data on new house price inflation.
The U.S. is to release the weekly report on initial jobless claims.
Swiss National Bank Chairman Thomas Jordan is to speak at an event in Frankfurt.
Friday, November 10
The RBA is to publish its monetary policy statement.
The UK is to report on manufacturing output and the trade balance.
The U.S. is to round up the week with preliminary data on consumer sentiment.
Nov 05, 2017 11:16 GMT © Reuters. Gold prices fall to 1-week lows on stronger dollar