MW: Gold off 1% as dollar rallies on worse-than-forecast jobs data
NEW YORK (MarketWatch) -- Gold futures fell more than 1% Friday, trading below $990 an ounce, as the dollar rallied on the heels of a disappointing U.S. jobs report and in turn reduced gold's appeal as an alternative investment.
Gold for December delivery fell $10.90, or 1.1%, to $989.80 an ounce on the Comex division of the New York Mercantile Exchange. The October contract was down $10.40, or 1%, at $989.10.
Both gold contracts are on track to end the weekly slightly lower.
"We have uniform selling in the markets with stop-loss orders taking gold down and the dollar up," said George Gero, a precious-metals trader for RBC Capital Markets.
A stop-loss order, placed with a broker to sell a futures contract when it reaches a certain price, is designed to limit an investor's loss.
"We may test $980 support area and still have a $1,025 upside resistance to face," Gero added. "If we are visiting the same fundamentals as before, then the possible sell-off will again be a buying opportunity."
The Labor Department reported that 263,000 payroll jobs were lost in September. Economists had expected a decline of 167,000 jobs. The unemployment rate rose to a 26-year high of 9.8%.
The U.S. dollar gained on most major rivals after the jobs data, with the dollar index (DXY 77.20, +0.01, +0.01%) up 0.2% to 77.316. A stronger dollar tends to push down dollar-denominated commodities prices, including metals.
"The dollar is rising out of fear that the jobs report is foreshadowing a weaker U.S. economy," said Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm. "As a result gold is sliding."
In exchange-traded funds, holdings in SPDR Gold Trust (GLD 98.27, +0.38, +0.39%) , the biggest gold ETF, stood at 1,095.33 metric tons Thursday, unchanged from a day ago.
December copper futures fell 6.95 cents, or 2.5%, to $2.675 a pound. Silver for December delivery lost 37.5 cents, or 2.3%, to $16.065 an ounce.
October platinum gave up $11.70, or 0.9%, to $1,270.30 an ounce, and December palladium rose 55 cents, or 2.1%, to $293.55 an ounce.
