FUND selling has clipped gold futures as stronger-than-expected payrolls data sapped their safe-haven allure and a muscular US dollar pressured prices.
August gold dipped $US19.70 to settle at $US962.60 an ounce on the Comex division of the New York Mercantile Exchange. Shortly after gold closed, the ICE Futures US dollar index was up nearly 1.5%.
The funds essentially were unwinding a "rash" of buying that came in recent sessions on dollar weakness, said Michael Gross, broker and futures analyst with OptionSellers.com.
The funds were selling short, as well as liquidating some long positions, said George Gero, vice president with RBC Capital Markets Global Futures.
"The payrolls data were not as bad as everybody expected," he said. "That probably changed some portfolio managers' minds about the time it would take the economy to recover."
Non-farm payrolls slid 345,000 in May, the US Labor Department said Friday, well below the 525,000 decline economists had expected.
"Down the road that will be inflationary, but that took some of the risk premium out of gold," said Sterling Smith, vice president with FuturesOne.
Last month's payrolls drop was the smallest since September 2008, when the recession intensified in the wake of the collapse of Lehman Brothers.
"This is good news," said Bill O'Neill, a principal with LOGIC Advisors. "The reality is that it lessens the crisis mentality. The alternative asset demand is lessened."
Silver futures took their cue from gold. Comex July silver fell 50.7 cents to settle at $US15.388 an ounce.
"Silver just kind of follows gold," Gero said.
Meanwhile, Nymex July platinum fell $US7.10 to settle at $US1,286.20 an ounce, while September palladium on the exchange gained $US4.40 to settle at $US259.80 an ounce.
The platinum group metals ended mixed as the give-and- take of investor speculation was driving the metals. "There's really nothing else out there," a trader said.
