The gold price dropped further from last week's highs this morning, dipping to its lowest since February 28 on easing fears about a US economic slowdown. Spot gold bottomed out at $1,327.65 before recovering to $1,332.70/1,333.50 per ounce, down $6.55 or 0.5 percent. The metal was put under pressure by Friday's better-than-expected US jobs report - the February non-farm payrolls number came in at 175,000, well above the forecast 151,000 and the first positive surprise in this series since November. This reaffirmed speculation that the Federal Reserve will continue to unwind its quantitative easing programme at the current pace of $10 billion per month. Also weighing on gold was the slump in the copper price, which hit its lowest since mid-2010 on Monday, on worries about the Chinese economy and Russia's intervention in the Ukraine. "The precious metals have been dragged lower by the weakness in the copper and, with equities also concerned by the weak Chinese data, further risk reduction may well weigh on prices," FastMarkets analyst William Adams said. "Still, gold is well placed to see some safe-haven demand and the risks to supply are still present in the platinum group metals." China's trade balance swung to a deficit in February when exports dropped 18.1 percent from the same month of 2013 while the country's CPI also eased to 2.0 percent from 2.5 percent and the PPI dropped 2.0 percent. Exacerbating fears about a possible Chinese slowdown were reports on Friday of a solar panel maker defaulting on interest payments owed on bonds. Previously, the government and state-owned banks have helped bail out or provide last-minute loans to Chinese firms in trouble. On currency markets, the dollar slipped a fifth of a cent against the euro but was holding short of Friday's low - it was last at 1.389. But global equities indices are mixed. The FTSE 100 and the Dax are higher, while the Nikkei and Hang Seng both lost more than one percent. Gold backing exchange-traded funds edged higher again on Friday, with an increase of 1.65 tonnes in the funds tracked by FastMarkets lifting the total to 1,740.55 tonnes. The rest of the precious metals also struggled. The silver price was the biggest loser - it dipped to $20.59, the lowest since February 14, and it was last nine cents lower at $20.77/20.82 per ounce. The platinum group metals also handed back gains. The platinum price fell $14 or nearly one percent to $1,462/1,472 per ounce, while palladium slipped $4 to $771/776 although it remains near its highest in around 13 months. "We see this pause as just a bout of consolidation while the market gets its breath before challenging the $787 resistance level," FastMarkets' Adams said. "Outside the technicals, much will probably depend on how long the strikes in South Africa last."

Source