RTRS: Gold inches lower on U.S. payrolls, rate hike fears
* U.S. payrolls data beats forecasts, boosts dollar
* Gold slips as likelihood of U.S. rate hike strengthens
* GRAPHIC-2016 asset returns: reut.rs/1WAiOSC
(Updates prices)
By Zandi Shabalala
LONDON, Aug 8 Gold slipped to a one-week low on
Monday, adding to a near 2 percent loss sustained in the
previous session on renewed expectations of a U.S. interest rate
hike after stronger-than-expected payrolls data.
U.S. employment rose more than expected for the second month
in a row in July and wages picked up, bolstering expectations of
faster economic growth, and raising the probability of an
interest rate increase this year.
Spot gold was down 0.23 percent at $1,332 an ounce at
1117 GMT, after dipping to $1,329.58, the lowest since July 27.
U.S. gold for December delivery inched 0.45 percent
lower to $1,338.40 an ounce.
"Gold is under pressure this morning. It's still a reaction
after Friday's strong U.S. jobs report," ABN AMRO commodity
strategist Georgette Boele said.
"It's on the defensive because the market is expecting more
of a rate hike after Friday."
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.
U.S. stocks, European shares and the dollar gained after the
U.S. job data.
There was a mix of short covering and bargain hunting in
Asian trading hours on Monday before sellers wrestled back
control, MKS PAMP Group trader Sam Laughlin said in a note.
Speculators added net longs in gold futures for the first
time in four weeks in the week to Aug. 2, though they remained
below last month's highest level in more than two years.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose by 7.1 tonnes to 980.3
tonnes on Friday, its biggest one-day inflow since late June.
"Gold remains overbought ... evidenced by large net long
positions in Comex and ETFs, and we feel is vulnerable to
further downside in the short term," MKS said in a note.
Among other precious metals, silver was down 0.2
percent at $19.67 an ounce after hitting a near two-week low at
$19.56. It fell 3 percent on Friday.
Hedge funds and money managers decreased their net long
position in COMEX silver contracts for the first time in two
months in the week to Aug. 2, taking it off the previous week's
record high, data showed on Friday.
Spot platinum edged up 0.39 percent to $1,146.50,
while palladium was down 0.78 percent at $688.60.
