Gold fell in New York and London, heading for its first weekly decline in five, as US employment figures bolstered expectations that the worst of the recession may be over, reducing demand for bullion as a store of value.
Payrolls fell by 345,000 in May, the least in eight months, the Labor Department said today. Still, the jobless rate rose to 9.4 per cent, the highest since 1983. The US Dollar Index, a six-currency gauge of the dollar’s value, jumped as much as 1 per cent. It typically moves inversely to gold. Futures indicated US shares would climb when trading begins.
"With an economic recovery on the way, the need to hold gold is going to be reduced," Peter Fertig, owner of Quantitative Commodity Research in Hainburg, Germany, said today by phone. "Investors are now taking more risks, investing in stocks instead of gold."
Gold futures for August delivery dropped $US18.70, or 1.9 per cent, to $US963.60 an ounce on the New York Mercantile Exchange’s Comex division. The metal is down 1.7 per cent this week after four weeks of gains. Bullion for immediate delivery in London slid $US18.57, or 1.9 per cent, to $US961.68 an ounce.
The metal rose to $US977.75 in the morning "fixing" in London, used by some mining companies to sell production, from $US970.75 at yesterday’s afternoon fixing.
