Gold futures fell Friday for the first session in five, reducing their weekly gains as government data showed the U.S. economy lost fewer jobs than expected in April, easing economic worries and curbing gold's appeal as a safe asset.
U.S. nonfarm payrolls fell by 539,000 last month, the Labor Department reported. Analysts on average had expected a decline of about 600,000. The unemployment rate rose to a 26-year high of 8.9%, in line with expectations.
June gold slid $4.50, or 0.5%, to $911 an ounce on the Comex division of the New York Mercantile Exchange.
"The jobs data can be filed under the category 'less bad,' which is the theme permeating the markets," said Brian Kelly, chief executive officer of Kanundrum Research, a commodities and macroeconomic research firm.
The April jobs report reflected an easing in the pace of massive job destruction from the previous five months. Since the recession began in December 2007, payrolls have fallen by 5.7 million, or 4.1% of payrolls, the largest percentage decline since the 1958 recession.
April's loss of 539,000 jobs was the smallest decline since October's 380,000. See Economic Report on payrolls data.
Gold's weekly gain
Despite the loss on Friday, gold is poised to end the week up more than 2% after investors bought the precious metal on worries that central banks' effort to pump liquidity into the market could raise inflation in the long term.
The European Central Bank on Thursday cut its benchmark interest rate to a record low of 1%. It also said it may offer banks longer-term loans to stem the region's economic recession.
The Bank of England surprisingly increased a bond-purchasing program. Having cut their key rates to close to zero, the Bank of England, U.S. Federal Reserve and Bank of Japan are now buying bonds, essentially printing money to reflate their economies in a policy known as quantitative easing.
Economic-sensitive commodities such as copper and crude also moved higher, on hopes that the economic crisis has bottomed.
In other metals Friday, July silver sank 18 cents, or 1.3%, to $13.85 an ounce. June palladium rose $1.95, or 0.8%, to $243.65 an ounce, as the July contract for platinum declined $2.90, or 0.3%, to $1,154.40 an ounce.
Copper for July delivery lost 1.45 cents, or 0.7%, to $2.15 a pound.
